Advisers to Donald Trump are exploring ways he can green light the Keystone XL oil pipeline on the day he is sworn into office, including by rescinding a 48-year-old presidential order.
Two people familiar with Trump’s transition planning say the issue is actively being discussed, as the incoming president looks for ways to jump-start infrastructure development and deliver on a campaign promise to approve the pipeline that would connect Canadian oil sands with U.S. Gulf Coast refiners.
Although details are still being developed, the strategy hinges on Trump rescinding a 1968 executive order that put the State Department in charge of permitting border-crossing oil pipelines, said the people, who spoke on the condition they not be named discussing internal deliberations. That directive, issued by President Lyndon B. Johnson, assigned the State Department responsibility for determining whether proposed projects serve the “national interest.”
Trump’s actions wouldn’t guarantee the pipeline’s construction in the face of environmental opposition that helped kept it in limbo for years. “If Trump grants the permit, there will be a massive backlash, both on the ground and in the courts, that could tie this project up for years,” said May Boeve, executive director of the climate action group 350.org.
Legislation proposed in Congress also would shift responsibility for vetting any pipelines and power lines proposed to cross the U.S. border with Canada and Mexico, but Trump doesn’t need to wait for Capitol Hill.
He can rescind the Johnson-era executive order immediately, said Susan Dudley, director of the Regulatory Studies Center at George Washington University. As easily as presidents issue executive orders, they can rescind them, Dudley said.
Oil pipelines generally would still be subject to environmental review, even if the State Department isn’t involved. And TransCanada Corp. may need to submit another formal application to build Keystone XL. But the company’s plans to build Keystone XL already have been vetted, with years of environmental scrutiny culminating in President Barack Obama’s decision last year that the pipeline was not in the U.S. interest.
The Calgary-based company has not explicitly said it would reapply for permission to build the pipeline, but the day after Trump’s election, TransCanada said it was looking for ways to convince the new administration of the project’s benefits to the U.S. economy.
TransCanada spokesmen did not respond to telephone calls and emails seeking comment Wednesday.
Environmentalists fiercely battled the project, making it a flashpoint in broader debates about U.S. energy policy and climate change. Landowners in the pipeline’s path warned that a spill of dense oil sands crude could contaminate the Ogallala aquifer, a source of drinking water that stretches from Texas to South Dakota. And activists said it would promote further development of oil sands in Alberta, Canada, that generally require more energy to extract.
Those objections won’t be obliterated with the stroke of Trump’s pen, said Boeve, with 350.org.
“Keystone was always a bad deal for the climate, for landowners, and for workers, who got sold a bunch of false promises about the number of jobs the pipeline would create,” Boeve said. “If Trump’s really such a businessman, he’ll see right through this boondoggle and focus his support for the clean-energy economy instead.”
Trump has already said Americans should glean more benefits from the project, insisting in May that he wants a “better deal.”
“I want the Keystone pipeline, but the people of the United States should be given a piece, a significant piece of the profits,” Trump told reporters in North Dakota.
The State Department’s role in vetting pipelines crossing U.S. international borders has deepened in the decades since Johnson’s original order. Requirements for consulting with other federal agencies were added in 1994, and in 2004, former President George W. Bush outlined more procedures for reviewing presidential permit applications.
TransCanada has filed a $15-billion arbitration claim challenging Obama’s rejection of Keystone XL under the North American Free Trade Agreement.
Canada’s government has largely avoided raising Keystone since the U.S. election, saying it’s up to the company to reapply for American approval.
“The government will continue to support the project,” Natural Resources Minister Jim Carr told Canada’s House of Commons on Oct. 16. “All of the approvals north of the border are in place. They will not run out.”
Canada, meanwhile, is facing decisions on three other pipelines over the next month—Enbridge Inc.’s Line 3 and Northern Gateway projects, each due Nov. 25, and Kinder Morgan Inc.’s Trans Mountain expansion, due Dec. 19. Prime Minister Justin Trudeau’s government has downplayed the significance of Keystone, which is an inland route, saying Canada is still focused on building a new pipeline to the ocean to sell its oil to markets beyond the U.S.
If Trump removes the State Department’s authority to scrutinize border-crossing pipelines, federal regulators would still play a role vetting those projects. Federal agencies including the U.S. Army Corps of Engineers and the Interior Department are involved in permitting oil pipelines. That architecture would largely be untouched by action merely removing the State Department’s role.
The Association of Oil Pipe Lines said it would welcome changes that streamline permitting.