Additional Comment Period May Prolong Keystone Review

The U.S. State Department will give the public more time to comment on the Keystone XL pipeline, which could delay the final decision on a project that has been under review for more than five years.

The department is completing a final environmental assessment of the proposed pipeline that would carry oil sands crude from Canada to refineries along the Gulf of Mexico coast. When the assessment is released, State Department officials will start a process to determine whether TransCanada Corp. (TRP)’s $5.4 billion project is in the national interest before President Barack Obama makes a final decision.

The agency will seek public comment during the national interest determination review period, according to the official who requested anonymity to discuss decisions. The agency didn’t say how much time the public will have to submit comments.

“At some point you have to say the time that it has taken is not appropriate,” Senator Heidi Heitkamp, a North Dakota Democrat who backs the project, said at a news conference after meeting with Canada’s U.S. Ambassador Gary Doer and Foreign Affairs Minister John Baird to discuss the project.

“Anything that would delay it, anything that would lengthen a comment period, anything that would once again say no to this project by delay, as opposed to no to this project by actual decision-making, will not be viewed very favorably” by Congress, Heitkamp said.

Environmental Fight

The proposed pipeline has galvanized environmental groups, which are pushing Obama to reject the project because they say it will increase greenhouse-gas emissions tied to climate change. Labor unions and many Republicans in Congress back the project to help create jobs and expand the U.S. economy.

A draft environmental impact review by the State Department concluded the pipeline wouldn’t worsen climate change because the carbon-heavy oil would find its way to market by other means. The agency held a hearing and accepted comments for the environmental impact study, a final version of which hasn’t yet been released. Once it is complete, federal agencies will have 90 days to submit comments on the project’s national interest.

Pipeline opponent Tom Steyer, a billionaire investor and Obama fundraiser, today said it will be difficult for the State Department to reverse its position that the pipeline wouldn’t contribute to climate change.

“It’s really hard to believe that bureaucracies go back and say we did” a bad job, Steyer said in an interview while attending a United Nations conference in New York.

Obama’s Stance

Obama has said he won’t approve TransCanada’s application to build the Keystone line between Alberta’s oil sands and U.S. Gulf Coast refineries if it were found to substantially boost carbon-dioxide emissions, which scientists say are raising the Earth’s temperature.

TransCanada wanted the agency to truncate the national interest review and not solicit additional public comment, TransCanada Chief Executive Officer Russ Girling said in a Dec. 17 interview with Bloomberg News at his Calgary office.

“I can’t think of anything that hasn’t been said. I can’t think of a reason to have another public meeting on this issue. I can’t think of any new information that could come forward,” he said. “I’m still of the view that you could come to a decision in the first quarter of this year if folks wanted to get there.”

Canadian Poll

TransCanada declined to comment today on the State Department process in an e-mail from Shawn Howard, a company spokesman.

The State Department is reviewing TransCanada’s application to build Keystone because the project would cross the U.S.- Canada border.

The proposed pipeline is losing popular support in Canada, according to a poll released today by Nanos Research Group. Canadian support declined to 52 percent in December from 68 percent in April, while opposition has increased to 40 percent from 28 percent, a development that could embolden opponents of the project.

The survey of 1,000 Canadians taken Dec. 14 to Dec. 16 has a margin of error of 3.1 percentage points, according to the Ottawa-based research company.

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: Jon Morgan at jmorgan97@bloomberg.net

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