Keystone Oil Sands Expansion Pipeline

Keystone Pipeline – The Obama administration said Thursday it will delay a decision on the controversial Keystone oil sands pipeline expansion until at least 2013.

Citing concern over the proposed route through Nebraska’s Sand Hills region and over the Ogallala Aquifer, the State Department said it needs more time to study the issues and look at possible alternative routes.

Based on previous pipeline permitting experience, the State Department said the review process “could be completed as early as the first quarter of 2013.”

In a separate statement, President Obama said he supported the State Department’s move.

“The final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people,” said Obama.

The news set off a firestorm of comments from the pipeline’s supporters and opponents, and shows just how political the issue has become.

While the decision has been put off until after the presidential election, it will no doubt be seized upon by the president’s supporters and opponents during the election season.

TransCanada, the company that wants to build the $7 billion pipeline, showed no indication of scrapping the project, even though it previously said the added expense of trying to get new permits, plus the loss of customers who have signed up to take delivery of the oil, could lead the company to kill it altogether.

“We remain confident Keystone XL will ultimately be approved,” said Russ Girling, TransCanada’s president and chief executive officer. “This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed.”

Indeed, the company confirmed it has already bought $1.7 billion worth of steel pipe.

The 1,700-mile pipeline is supposed to take oil from Canada’s oil sands region in Alberta to refineries on the U.S. Gulf Coast.

Environmentalists hated the project from the get-go, fearing the pipeline not only risks spills but would lock the U.S. into dependency on oil sands, a particularly dirty form of oil.

Oil sands are just that — oil mixed with sand. To get a useful type of crude, heat is used to separate the oil from the sand. The process results in anywhere from 5% to 30% more greenhouse gas emissions than conventional oil would generate.

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