The Waiting Game
TransCanada to Obama: Forget About Keystone

The company in charge of actually building the controversial Keystone pipeline that’s been more of a political football than hydrocarbon conveyance in recent years has asked the White House formally to suspend its already decidedly suspended permitting process. After waiting seven years in regulatory limbo, TransCanada doesn’t seem to have faith that the Obama administration is capable of making its mind up on the project that would connect Albertan oil sands projects with U.S. refineries on the Gulf coast. The FT reports:

[TransCanada] said on Monday it had written to John Kerry, the US secretary of state, saying it believed that “it would be appropriate at this time for the state department to pause in its review of the presidential permit application for Keystone XL.”

TransCanada explained that it had filed an application with the energy regulator in the state of Nebraska, which the pipeline is intended to cross, to take its preferred route. The regulator is expected to take seven to twelve months to review that proposal, the company said. While that process was going on the state department should suspend the federal decision, as it did during a previous period of argument over the route through Nebraska, last year.

Unless Mr Obama chooses to rush a decision through in his last few months in office, that would mean a decision would be left to his successor.

There could be a number of factors at play in TransCanada’s decision. The company could simply be exhausted with dealing with the Obama administration, and might see continuing to pursue a permit in Obama’s final year in office a fruitless endeavor.

It likely also has an eye on oil markets and the shrinking (and in some case non-existent) profit margins in the oil sands projects Keystone is meant to service. In that context, requesting a postponement might be done with the hope that oil prices might rebound sometime in the coming years, and that, when that happens, Keystone will once again be up for review.

Finally, it’s impossible to ignore the political calculus of TransCanada’s decision with next year’s elections looming. If that’s the real reasoning behind the company’s new strategy, it doesn’t seem to place much faith on its part in Hillary Clinton’s chances—she’s already come out against the pipeline.

Up until now the White House was doing all of the can-kicking on Keystone, but now it seems all parties involve have an interest in delaying a final decision further. The rest of us will just have to endure the project’s lengthening life as a political football.

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