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Trump administration to give green light to Keystone XL pipeline

Reviving a big oil project which environmentalists had hoped was dead and buried, the Trump administration plans to announce Friday that it has issued a permit for the Keystone XL pipeline.

The project, which would ship 800,000 barrels of oil a day from Canada's tar sands to Gulf Coast refineries, had been rejected by the Obama administration last year, a move heralded by climate activists. The rejection came just before the former president signed an international agreement on global warming in Paris.

But Trump vowed to undo the previous administration’s work on climate change. He announced soon after taking office that he would seek to restart the pipeline project, a clear signal that he would move aggressively to promote oil development.

The pipeline's future, though, remains uncertain. 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 costly, and it remains to be seen if the project will ultimately cost out.

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

Crews clear a route in preliminary construction work for the proposed Keystone XL pipeline near Winona, Texas. (Sarah A. Miller / Tyler (Texas) Morning Telegraph)
Crews clear a route in preliminary construction work for the proposed Keystone XL pipeline near Winona, Texas. (Sarah A. Miller / Tyler (Texas) Morning Telegraph)

About half the steel being used to build 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 plans to speak about the project this morning, according to a tweet from White House Press Secretary Sean Spicer.

The State Department earlier announced that the pipeline developer, TransCanada, has been given the required permit to construct a line that crosses the U.S. border. The State 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 ExxonMobil, 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.

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