US says Keystone XL environmental review fails to reach firm conclusions


WASHINGTON -- A State Department official said Friday that the department's review of the long-delayed Keystone XL pipeline doesn't reach any firm conclusions about the environmental impact of the pipeline.

Kerri-Ann Jones of the State Department was speaking after the release of a lengthy draft environmental review of the pipeline, which would carry oil from Canada to the US.

In one possible favorable sign for project supporters, the draft assessment said that building the pipeline would not "significantly" impact the further development of Canada's tar sands or US demands for heavy oil. Environmentalists have attacked the project because, they say, further tar sands development would be economically challenging without a pipeline.

The Obama administration likely will not make a final decision on the pipeline until this summer at the earliest. The State Department said the preliminary environmental review would be subject to 45 days of public comment, and it said it wouldn't issue conclusions now.

"We" re not going to come out and make those conclusions at this point, until we engage with the public and really get some feedback. We have found that there are in some cases impacts, in some cases those impacts can be mitigated," Ms. Jones said. She called for a "fuller public debate before we move forward."

The Obama administration rejected the pipeline in early 2012 after Congress set a decision deadline he called unworkable. That prompted Canadian firm TransCanada to resubmit a permit application for a revised pipeline route.

Approval of the project could help consolidate the North American energy boom by making it easier to move about 800,000 bpd of crude oil from the Canadian province of Alberta to the US Gulf Coast for refining. Approval would also smooth relations with Canada, which is eager to see greater pipeline construction to speed its crude to market.

However, approving the pipeline carries significant political risk for the Obama administration. Many big environmental groups have long opposed the project, both in its original form because it would have crossed an ecologically sensitive aquifer in Nebraska and because producing crude oil from tar sands creates more greenhouse-gas emissions than regular crude-oil production.

Last month, environmentalists staged a large protest in front of the White House urging Mr. Obama to block the pipeline.

TransCanada revised the route for Keystone XL last year to address the Nebraska ecological concerns. Nebraska Gov. Dave Heineman approved the new route in January.

Energy analysts believe Mr. Obama could approve the pipeline and still assuage environmentalists by taking more aggressive steps to curb greenhouse-gas emissions elsewhere. In his State of the Union address, Mr. Obama said that he would use executive actions in the absence of congressional action to limit greenhouse-gas emissions.

The Environmental Protection Agency is already preparing rules that would put sharp limits on the amount of carbon dioxide that new power plants can emit.

Dow Jones Newswires

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