Keystone XL Inching Toward Approval
BMI View: A recently issued US State Department report, indicating that approving the Keystone XL project will not significantly affect the environment, represents a boost for proponents of the project. Indeed, while we acknowledge that the issue remains highly divisive, given both the report's conclusions and the current political calculus facing the president, we believe it is looking increasingly likely that the project will be approved.
On January 31, the US State Department issued its final supplemental environmental impact assessment on the Keystone XL pipeline. The report's conclusions increase the likelihood that the controversial project will eventually be approved by the Obama administration. Namely, one of the key findings was that, in and of itself, the project is unlikely to have a substantial impact on the development of Canada's oil sands. While this assessment is still fervently disputed by many pro-environmental activists, it brings into question one the key environmental reasons against building the pipeline. As such, and given the benefits of approving the pipelines, we believe that it is looking increasingly likely that the president will, sooner or later, give the project his blessing.
We stress the recent report from the State Department does not necessarily mean that approval is imminent. Rather, this was one of a series of steps that needs to be taken before a verdict on the project can be reached. Next, the State Department will commence a consultation period with other federal agencies, not to exceed 90 days, in which it will be determined whether the pipeline serves the US national interest. At the same time, the agency will hold a 30-day public comment period, from February 5 to March 7. After the public and interagency consultation period is finished, the president's decision to offer or refuse his permission for the project will follow, though there is no deadline for a decision. However, we ultimately believe that the project will go forward sooner or later.
|Winding Toward Completion|
|Keystone XL Pipeline Evaluation Process|