WASHINGTON Feb 20 A Nebraska judge's ruling on
the Keystone XL pipeline could let President Barack Obama delay
his final decision on the project until after mid-term elections
and avoid political damage, analysts say.
The Nebraska ruling on Wednesday put the controversial
project in legal limbo and likely delayed the state's decision
on the pipeline until later this year.
That raised the possibility Obama would wait until the
Nebraska situation is resolved before making his final decision,
possibly after Nov. 4 elections that could determine whether his
Democratic Party keeps control of the Senate.
Approving TransCanada Corp's $5.4 billion pipeline
before the elections would anger environmentalists, an important
part of Obama's base.
An approval could, on the other hand, help vulnerable
Democrats like Mary Landrieu in Louisiana and Mark Begich in
Alaska, who are from energy producing states, as well as Mark
Pryor of Arkansas and Kay Hagan of North Carolina.
Once complete, Keystone could ship more than 800,000 barrels
per day of Canadian crude oil that is emissions intensive to
It's not clear what greens would do to vent their anger.
Staying home on election day could be one option. But a protest
movement that has crystallized against Keystone could also turn
next to other energy projects such as wells that conduct
hydraulic fracturing, or fracking, for oil and natural gas.
Environmentalists could also try to delay approvals of
terminals to export liquefied natural gas, potentially blocking
part of the climate action plan Obama introduced last year to
help create a global market for U.S. gas.
"Politically it raises the cost of the president's approving
the permit, at least before the state issues are resolved," said
Robert McNally, president of Rapidan Group, an oil consultancy,
who was an energy advisor to former President George W. Bush.
The Nebraska ruling "gives Obama an excuse to punt the
decision past the election," said McNally, who believes Obama
will eventually approve Keystone to improve U.S. energy security
and maintain relations with Canada.
Nebraska judge Stephanie Stacy struck down a state law on
Wednesday that allowed Governor Dave Heineman to approve the
Keystone pipeline's path through the state.
TransCanada may now have to submit an application to the
Nebraska Public Service Commission, and the agency's decision
could take seven months or more. Stacy's ruling has also been
appealed by the state's attorney general on behalf of Governor
Dave Heineman, but it is uncertain how long the legal process
The White House referred questions about the Nebraska ruling
to the State Department.
The State Department would not comment on whether it will
put a hold on its process for weighing whether Keystone is in
the country's interest to await Nebraska's next move.
"It just came out yesterday. We are still sort of looking at
all of it," Assistant Secretary of State Kerri-Ann Jones in
charge of environmental affairs told reporters, about the
Nebraska court ruling.
There is nothing in the Nebraska ruling that prevents the
State Department from continuing the 90-day national interest
determination that is now in its third week.
Eight federal agencies including the Departments of Defense,
Commerce and Transportation and the Environmental Protection
Agency are working with the State Department to determine
whether Keystone would benefit the U.S. economy and energy
Any delay by the Obama administration would more likely come
after the agencies have made their assessment, analysts said.
Secretary of State John Kerry is expected to make a
recommendation to Obama but has no firm deadline to do so.
Although in theory the administration could approve Keystone
before the Nebraska situation is resolved, Obama and Kerry would
probably not do so, Divya Reddy, an analyst at the Eurasia Group
risk consultancy said in a note to clients.
"Risks of slippage on timing are now higher and will depend
heavily on the outlook for the appeals process in Nebraska,"