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Trump administration approves Keystone XL pipeline, but its future remains in question

Trump administration approves Keystone XL pipeline, but its future remains in question
Crews in 2012 clear the route for the Keystone XL pipeline through East Texas, where construction was completed in 2014. (Sarah A. Miller / Tyler [Texas] Telegraph) (Sarah A. Miller / Tyler (Texas) Morning Telegraph)

President Trump reignited a bruising battle over the nation’s energy future that environmentalists had hoped was behind them when he announced Friday that his administration has issued a permit for the Keystone XL pipeline.

But, although Trump portrayed the pipeline as a done deal now, its future remains uncertain. It faces difficult economic issues as well as a newly revived protest movement dedicated to stopping it.

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The project, which would ship more than 800,000 barrels of oil daily from Canada's tar sands to U.S. Gulf Coast refineries, was rejected by the Obama administration last year after a decade of protest by climate activists, land owners and Native Americans. The rejection came just before President Obama signed an international agreement on global warming in Paris.

The new administration reversed that decision Friday, as Trump moved to fulfill his vow to undo the previous administration's work on climate change and aggressively promote oil development.

"It is going to be an incredible pipeline," Trump said, to be built with "the greatest technology known to man or women."

At the White House session where he announced the decision, the president credited himself with reviving a project that developer TransCanada Corp.'s immense lobbying team had been unable to move forward over a period of years.

"I hope you didn't pay your consultants anything," Trump told TransCanada Chief Executive Russell Girling. "In fact, I hope you get back the hundreds of millions that you paid them because they didn't do a damn thing except get you a 'no' vote."

Yet, the project still has a long way to go. Keystone was conceived at a time of significantly higher oil prices. Its developers had not envisioned prices would drop and remain so low, for so long.

Extracting oil from the tar sands is expensive, and it remains to be seen if the project will ultimately cost out. There are also significant remaining legal hurdles for TransCanada to overcome.

Already, the White House has retreated from a demand that the builders of the pipeline use American steel — a provision that Trump announced with considerable fanfare. That requirement would have raised the cost of the project substantially.

Instead, about half the steel for the pipeline would be imported, much of it from India and some from a Canadian company owned by a wealthy Russian. White House officials said they exempted the project from Trump's buy-American order because it was already underway at the time the order was signed.

Trump appeared surprised to learn Friday that TransCanda still has work to do before it can proceed.

"The bottom line: Keystone, they are finished," he said. "They are going to start construction when?"

Girling explained that the company has yet to secure the necessary permits in Nebraska, a process that involves multiple stakeholders and will take months.

"Nebraska?" Trump said. "I'll call Nebraska. They have a great governor."

That call may not do much for the pipeline. The decision in Nebraska rests in the hands of an independent commission, with members elected by voters. It will soon be taking testimony from dozens of stakeholders determined to stop construction.

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"We will never allow an inch of this foreign steel pipeline that can pollute our water and take away our property rights and has threatened treaty rights of tribes here," said Jane Kleeb, president of the Bold Alliance, an advocacy group started in Nebraska to oppose the project.

Her group is among many that have mobilized to fight. They are organizing street protests, planning for encampments along the pipeline route and drafting briefs for what they say will be a deluge of legal action.

The State Department was formally responsible for the permit TransCanada was given to construct a line that crosses the U.S. border. The department concluded that building Keystone is in the national interest, reversing the view of the Obama administration.

Secretary of State Rex Tillerson, the former chief executive of Exxon Mobil Corp., had recused himself from the decision-making process. The permit was signed by Tom Shannon, a career diplomat serving as undersecretary of state for political affairs.

Environmental groups say the approval, like other ambitious executive actions made by the Trump administration early in its tenure, such as the ban on travel to U.S. from several predominantly Muslim nations, is legally vulnerable. The executive order to revive Keystone, which Trump issued in January, gave State Department staff only 60 days to re-review TransCanada's application, and no public comment was taken.

The department did not update the environmental impact study for the pipeline, a process that could have taken years. It instead relied on an assessment completed in 2014.

"The State Department violated key environmental review laws in its haste," said Michael Brune, executive director of the Sierra Club.

The pipeline has long been a potent symbol in the fight between green energy advocates and big oil companies, even though its significance to the nation's fuel supply and efforts to cut emissions is much smaller than activists on either side have claimed. The pipeline became a line in the sand for an environmental movement demanding that public officials stop backing big, invasive infrastructure projects that feed the world's oil habit. Those projects undermine the push for more green energy, environmental activists say.

The organizers of that protest movement warned Friday that Trump has just re-energized it.

"Americans have finally figured out, despite all the advertising and all the political boosting, what a scam this thing is," said Bill McKibben, founder of the advocacy group 350.org. "This fight will be very real and very intense."

But it is a fight Trump embraces, and one that could fortify his popularity with his base of supporters in the industrial Midwest. Trump alluded to the politics of Keystone on Friday.

"Other people were not going to be signing this bill, that I can tell you," he said to Girling. "If it ever did get done, it would be years. So we put a lot of people to work, a lot of great workers to work. And they very much appreciated it. And they appreciated it at the polls."

Follow me: @evanhalper

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