Feds put the brakes on oil-sand pipeline

November 11, 2011

Electric power providers aren’t the only ones contending with aggressive environmental actions from the Obama administration. A Canadian pipeline company has seen plans for a $7 billion project grind to a halt while the government considers alternate routes.

The proposed 1,700-mile pipeline would allow crude oil processed from Canada’s oil sands to travel to refineries along the Gulf Coast. Environmental groups have raised concerns that the Keystone XL pipeline would pass through large portions of the 174,000 square-mile Ogallala Aquifer, which provides drinking water to two million Americans and supports agriculture on the plains. Those groups cite leak problems with another TransCanada pipeline in North Dakota and Kansas. In addition, some environmentalists believe that the process used to extract the oil pollutes the atmosphere.

After two Congressmen raised concerns about the approval process and the State Department’s role in reviewing the route, the State Department’s inspector general’s office announced plans for an investigation.

Sources within the Obama administration predict that it will take a year or more to study new routes, so the final decision would come after the 2012 elections. House Republicans have blasted the delay, claiming that the pipeline project would create 20,000 direct jobs and lead to as many as 200,000 others.