Canadian sources are confirming rumors that the Obama administration could soon reject the controversial Keystone XL pipeline project.
Sources close to the project told the Canadian Press over the weekend that the Canada-based firm TransCanada, which is constructing the project, is preparing for the decision.
The State Department has been reviewing the pipeline project for six years, becoming a source of contention between Democrats and Republicans, who spar over the benefits of the project. Republicans want the project approved for the economic and jobs creation benefits. But Democrats say the project would only worsen the environmental challenges posed by climate change.
The nearly 1,200-mile pipeline would deliver tar sands oil from Canada to refiners on the Gulf Coast. The State Department has the final say on the project because it crosses an international border.
The Canadian Press cited a source involved in the pipeline project, who said: “The [rumor] is that the decision to deny has been made, and they’re just waiting for the right time and venue.”
The source said TransCanada is looking at a couple of options to respond to the project denial. The company would not likely reveal its next move on the day of the Obama announcement, the source said. “I think the most likely scenario is we’ll let it cool for a while. And then we’d have this more vigorous discussion.”
The official said the company is reviewing options with its legal team on appealing the administration’s decision under the North American Free Trade Agreement, where they could demand compensation from the U.S. government.
The press article also said TransCanada is contemplating resubmitting the application ahead of the 2016 presidential election. Given that the U.S. will be changing administrations, the project could fair better under another president.
The State Department did not have an immediate comment on the story on Monday afternoon.
Last week, three sources told the Washington Examiner that there was wild speculation that the administration would make a decision on Keystone last Friday, before the president left Washington for the August congressional recess.
Nothing happened, but an oil industry official familiar with the project said he wouldn’t be surprised if the administration made the decision sometime soon.
President Obama will go on a climate change tour at the end of the month, giving a keynote speech at a major clean energy conference in Las Vegas, before jetting off to Alaska to address a climate conference there. The Canadian Press article said the president could wait to make the decision at the end of the month at the high-level event in Alaska, or choose to more quietly make the decision.
