Why did company behind Keystone XL ask State Dept. to stop its review?

Activists say it may have something to do with the presidential election. 

Lane Hickenbottom/Reuters/File
A TransCanada Keystone Pipeline pump station operates outside Steele City, Neb., March 10, 2014. TransCanada Corp on Monday requested the suspension of the US permit for its Keystone XL crude oil pipeline, according to a report in the Wall Street Journal. Calgary-based TransCanada sent a letter to the US State Department to suspend its application while the company goes through a state review process in Nebraska, the report said.

TransCanada Corporation, the Canadian energy company behind the proposed Keystone XL pipeline, has asked the US State Department to put its review of the project on hold, prompting activists to say the company is stepping into party politics.

The company announced its action on Monday, closely following reports that President Obama will reject the $8 billion pipeline before the president's exit from office in January 2017. White House spokesman Josh Earnest recently confirmed Mr. Obama's desire to make a decision before his presidency ends.

Opposition and support for the 1,179-mile potential pipeline to export crude oil from Canada's tar sands divides presidential candidates: Hillary Clinton has said she would reject the pipeline, and her fellow Democratic candidates also oppose it. All of the top Republican candidates support the pipeline, although Donald Trump has said he would seek a "better deal" from TransCanada. 

The Calgary-based company said it is awaiting approval of the preferred pipeline route through Nebraska, where it is battling landowners in court. Until that route is secured, TransCanada wants the federally-mandated review to be put on hold, estimating that Nebraska authorities will take 7 to 12 months to come up with a decision as approval works through the state courts and legal pushback.

The State Department can opt to decline TransCanada's request for a delay, and continue its review. If the review is suspended, TransCanada could have a new administration reviewing the pipeline and handing down a decision. Opponents of the pipeline have already voiced opinions that delaying the review is a stall tactic. 

"In defeat, TransCanada is asking for extra time from the referees, and clearly hoping they'll get a new head official after the election. It's time for the current umpire, President Obama, to reject this project once and for all," said environmental activist Bill McKibben, co-founder of the group 350.org, in an interview with the Associated Press.

Some opposed to the pipeline are calling for Obama to ignore the request and move forward with rejecting the pipeline. Tom Steyer, the billionaire environmental activist who leads NextGen Climate said that "TransCanada acknowledged the writing on the wall by requesting to suspend the review of its permit application," in a statement.  

"Today, tomorrow, or next year, the answer will be the same: Keystone XL is a bad deal for America, our climate, and our economy," Mr. Steyer said.

The proposed pipeline, in limbo since 2008, would run from the oil sands in Alberta, Canada, through Montana, South Dakota, and Nebraska, funneling a daily haul of 800,000 barrels or more of crude oil to refineries along the Texas Gulf Coast. 

TransCanada spokesman Mark Cooper said the company has "been hearing since February the same rumors that a denial or a decision is imminent" from the White House, but added the company wants to show the United States that the project would be beneficial to its interests.

"Our focus isn't on the political machinations of what this president may or may not do or who may be in office a year from now," Mr. Cooper said, Reuters reports.

Russ Girling, TransCanada's chief executive officer, has not publicly commented, but earnings will be reported on Tuesday, and Cooper said the CEO will take questions then.

This report contains material from Reuters and the Associated Press.

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