Chip Yost, the vice president of energy and resources policy at the National Association of Manufacturers, called the study a “step in the right direction toward final approval of this important project.”
“Americans are frustrated with Washington’s inaction, and Keystone XL is a prime example of inexcusable bureaucracy and red tape,” he said. “It’s time for the administration to expeditiously complete its review and approve the pipeline to put Americans back to work.”
Obama had previously rejected an application by pipeline builder TransCanada, citing concerns about the original route through Nebraska’s ecologically sensitive Sand Hills region. But the president invited TransCanada to submit a new application once it had mapped out an alternative route for the pipeline, and the company filed a new application last May rerouting the pipeline around the Sand Hills.
Environmentalists have argued that increasing production of the heavy tar sands oil — which requires far more energy than conventional oil to extract, transport and refine — would dramatically increase carbon pollution. A Congressional Research Service report last May found that building the pipeline could cause an increase in annual greenhouse gas emissions equivalent to putting 588,000 to 4 million more passenger cars on the road.
But the State Department review found that denying the pipeline would not “significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the U.S.” If the project were denied and other pipeline and rail transport projects move forward, the decrease in production of the crude oil from not building Keystone would have little impact on emissions, the study found.
“Fundamental changes to the world crude oil market” would be needed to “significantly impact the rate of production in the oil sands.”
The draft review’s publication in the Federal Register will launch a 45-day comment period, which will include a public meeting in Nebraska, according to the State Department. After the study is finalized, the department will lead an interagency effort to determine whether the project is in the national interest.
The ultimate decision rests with the president.
The State Department says it won’t make a final decision on the pipeline until the second quarter of the year. Originally, it had said it expected a decision within the first quarter of 2013.