Harper: Obama 'punted' Keystone XL decision, confident pipeline will be built

VANCOUVER – Prime Minister Stephen Harper says U.S. President Barack Obama has “punted” a decision on the controversial Keystone XL oil pipeline, but he’s still confident the long-delayed $5.4 billion project will eventually be built.

Harper made his remarks during a question-and-answer session with Vancouver Board of Trade CEO Iain Black. When Black launched into one question by saying Obama had rejected the pipeline, Harper interjected.

“No, he’s punted,” the prime minister said of Obama. “He said ‘maybe.'”

“It is my hope that the administration will in due course see its way to take the appropriate decision, but that’s obviously a political process in the United States,” Harper continued.

“The good news is that on both sides of the aisle, in both political parties, in both houses, and throughout the American economy and public, there is widespread support for the project.

“I am confident that in due course the project will, in one way or another, proceed.”

TransCanada Corp. (TSX:TRP) first applied to build the 830,000-barrel-per-day pipeline more than five years ago. The Obama administration rejected an earlier iteration of it, but encouraged the company to re-apply with a tweaked route through Nebraska to address environmental concerns.

The US$2.3-billion, 700,000-barrel-per-day southern portion of the pipeline between Cushing, Okla., and the U.S. Gulf Coast — which TransCanada could build without U.S. State Department approval because it doesn’t cross an international border — is in the process of starting up.

In an interview last month, TransCanada CEO Russ Girling said he’s optimistic a final decision on the more contentious northern portion of the pipeline will come during the first quarter of 2014.

For future projects, like the $12-billion Energy East project to New Brunswick, Girling said the key will be keeping the project as far outside the political arena as possible.

“Having our projects intertwined in the political process when they should be rightly placed in the regulatory processes that are arms length from politics, that’s where we’re going to try to steer our projects going forward as best we can, to keep them apolitical,” he said.

In practical terms, that means getting out on the ground in communities along the pipeline route as early in the process as possible.

“We are just trying not to leave that playing field so wide open for somebody to create a cause celebre around this thing.”

Absent a “major score” on greenhouse gas emissions, environmental groups seized upon Keystone XL as a “bellwether” on the greater climate change issue, Girling said.

“Responsible people don’t make decisions of this magnitude on a symbolic basis. They make it based on facts.”

Marc Spitzer, a former commissioner with the Federal Energy Regulatory Commission who is now a partner with law firm Steptoe & Johnson LLP, said the Keystone XL has become “collateral damage” in an increasingly polarized U.S. political scene.

Those wondering why Keystone XL has become a “poster child” for the U.S. environmental movement might as well ask “why do people care about Miley Cyrus now?,” he said.

“It’s one of those accidents of history and the White House made it worse.”

Spitzer said Obama should have “lanced the boil” years ago and approved the pipeline.

“I can’t believe the White House finds it pleasant to have the Canadian government feel that they’ve been treated so poorly by the United States,” he said.

“I can’t believe that they enjoy the debate. They had to hide under their desks before the election and they keep putting this off. I can’t believe this is fun for them.”

— By Lauren Krugel in Calgary