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The U.S. Dept. of State recommended on Jan.18 to President Barack Obama that the presidential permit for the proposed Keystone XL Pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest.
President Obama agreed with the recommendation, which was predicated on the department not having sufficient time to obtain the information necessary to assess whether the project in its current state is in the national interest.
On Nov. 10, 2011, the State Department announced that it could not make a national interest determination regarding the permit application without additional information, specifically calling for an assessment of alternative pipeline routes that avoided the uniquely sensitive terrain of the Sand Hills in Nebraska.
The department estimated, based on prior projects of similar length and scope, that it could complete the necessary review to make a decision by the first quarter 2013. In consultations with Nebraska and TransCanada, they agreed with the estimated timeline.
On Dec. 23, 2011, Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 that provided 60 days for the president to determine whether the Keystone XL pipeline is in the national interest, which was insufficient for such a determination, according to the State Department.
The denial of the permit application did not preclude any subsequent permit application or applications for similar projects.
TransCanada Corp. received the decision and is considering a renewed application.
"This outcome is one of the scenarios we anticipated. While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL. Plans are already underway on a number of fronts to largely maintain the construction schedule of the project," said Russ Girling, TransCanada's president and chief executive officer.
"We will re-apply for a presidential permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014," he emphasized.
TransCanada will continue to work collaboratively with Nebraska's Department of Environmental Quality on determining the safest route for Keystone XL that avoids the Sandhills. This process is expected to be complete in September or October of this year, according to the company.
The issue has become a hot political issue during this election year. Republicans in Congress were exploring legislative avenues for forcing the issue on approving the pipeline. One proposal was to move the approval process from the State Department to the Federal Energy Regulatory Commission.