Obama Might Avoid Keystone Pipeline Decision

The State Department may have to restart its analysis of the Keystone XL pipeline, which could delay a decision on the controversial project until after President Barack Obama leaves office.

According to The Washington Times, some House Democrats are complaining about a suspected conflict of interest involving a contractor hired to work on the environmental study of the project being done under the State Department. If the current analysis has to be scrapped and a new one started it could delay the pipeline project, which would carry crude oil from the tar sands of Canada to Gulf Coast refineries, for perhaps another five years.

"I’ve been of the mind that there’s no way it makes any kind of sense [for the president to avoid a decision on Keystone]. But it’s been well over five years and yet he keeps proving me wrong," Dan Kish, senior vice president for policy at the conservative Institute for Energy Research, told the Times. "In my experience, a lot of times what happens is the way that the environmental community works, and the political community aligned with them, they will put all kinds of speed bumps in the way [of a project] and when the car falls apart because it takes one more speed bump they say, 'Look at that. The car couldn’t make it.'"

State contracted a top consulting firm, Environmental Resources Management (ERM), to conduct an analysis of the $7 billion pipeline. The job of reviewing the project was put under state because the pipeline crosses an international border.

The firm's preliminary review apparently concluded that the pipeline would not contribute to any increase in greenhouse gas emissions, but would create tens of thousands of jobs, a claim the Obama administration questions as overblown.

Critics of ERM, including environmentalists and House Democrats, say that the firm joined with other companies and groups, including the American Petroleum Institute, to lobby for the pipeline, an action they say taints its supportive review of the project.

According to the Times, the State Department Office of the Inspector General is now conducting a review to determine whether there was conflict involved on the part of ERM. Until a decision on that question is made, Arizona Rep. Raul M. Grijalva and other Democrats are urging that a final decision on whether to approve the project be delayed while another analysis is conducted.

"It would be unwise and premature for State to release a study prepared by Environmental Resources Management while it remains under investigation for lying to federal officials about its business connections and practices," Grijalva wrote in a letter, co-signed by two dozen other House Democrats, to President Obama.

TransCanada, the primary company behind the Keystone project, has not commented on the potential of a further delay. The project has already been on hold for five years, and the Canadian government has begun considering other ways to export its crude, including building a pipeline west to the Pacific Coast so oil can be sent to markets in Asia.

If that happens, Kish told the Times, that would also give Obama an out from having to make a decision on the pipeline before he leaves office.

"I’ve seen this over several decades with these environmental battles. First they say you need to study it, to do this and to do that. It delays it, delays it, delays it," Kish said. "And all of a sudden the project becomes uneconomic or they have sent a political signal to the market that they ought to back out."

Related stories:

• Canada PM Won't Accept Rejection of Keystone XL

• Gore to Obama: Veto the Keystone XL Pipeline