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Tuesday, January 14, 2014

Will the Obama Administration Wait Until After Midterm Elections to Make a Decision on Keystone?

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Keystone Pipeline

Analysts are divided over how an administrationwide review of energy policy that will focus on infrastructure might affect the Obama administration's decision on whether to approve the Keystone XL oil sands pipeline.

The review, ordered via a presidential memo Jan. 9, provides the “perfect cover” to delay a decision on the pipeline until after the midterm congressional election in November, according to Steven Paget, an analyst for Calgary, Canada-based FirstEnergy Capital.

But other analysts, such as Christi Tezak, managing director for Washington-based ClearView Energy Partners, told Bloomberg BNA that President Barack Obama's remarks over the summer that he would approve the pipeline only “if it does not significantly exacerbate the problem of carbon pollution” is already “enough cover.”

“We are hard-pressed to envision what information would arise from the [review] that hasn't already been more exhaustively compiled” in the State Department's Supplemental Environmental Impact Statement, Tezak said.

For the Quadrennial Energy Review, executive agencies will be required to provide regular recommendations to be coordinated by an interagency task force, with the first focused on the “infrastructure involved in transporting, transmitting, and delivering energy.”

The task force will submit a report to the president with recommendations every four years beginning Jan. 31, 2015.

The President's Council of Advisers on Science and Technology (PCAST) in 2010 recommended such a Quadrennial Energy Review to be conducted with input from Congress, the energy industry, academia and other organizations.

The Department of State will be among the agencies involved in the review because the $5.3 billion Alberta-to-Nebraska leg of the Keystone XL project crosses an international boundary.

The State Department initially was expected to release a final environmental review of the project by December, but no target date has been announced. The report then would be subject to a 90-day interagency review.

The Energy Department referred questions about how the review would affect the Keystone pipeline decision to the White House and State Department, neither of which answered a request for comment.

In the presidential memo ordering the review, the White House said the initial report would focus on energy infrastructure because “our current infrastructure is increasingly challenged by transformations in energy supply, markets, and patterns of use; issues of aging and capacity; impacts of climate change; and cyber and physical threats.”

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