TransCanada’s Keystone Pipeline Said to Be Delayed to Study Alternatives

The U.S. State Department will delay a decision on TransCanada Corp. (TRP)’s Keystone XL pipeline to study alternative routes, according to a department official familiar with its review of the project.

Analyzing routes that would take the pipeline away from the Sandhills region of Nebraska would require additional work on the environmental impact statement the department issued in August on the $7 billion pipeline, said the official, who spoke on condition of anonymity before an announcement.

Environmentalists and state officials in Nebraska have said the route risks polluting an aquifer that provides drinking water for 1.5 million people. Russ Girling, CEO of Calgary-based TransCanada, has said rerouting delays might kill the project.

A delay may spare President Barack Obama from having to make a final decision on the disputed project before next year’s presidential election, according to Michael McKenna, an oil- industry lobbyist and president of MWR Strategies Inc. in Washington.

‘Past the Election’

“The practical effect and the whole purpose is to get it past the election,” McKenna said in an interview.

The 1,661-mile (2,673-kilometer) pipeline would deliver 700,000 barrels a day of crude from Alberta’s oil sands to the Gulf of Mexico by crossing Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Larry Schweiger, chief executive officer of the National Wildlife Federation, said in an interview today that an administration official he didn’t name told him “the process for reviewing the pipeline will be re-opened. You can’t do that without a delay.”

The “process of review is housed within the State Department,” White House press secretary Jay Carney said today when asked about the decision. Any announcement on the pipeline will come from there, he said.

“The president wants the best possible decision,” Carney said at a briefing.

To contact the reporters on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net; Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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