Washington Energy Report > Troutman Sanders LLP

Keystone XL Pipeline Presidential Permit Denied

On January 18, 2012, President Obama issued a Presidential Memorandum directing the Secretary of State to deny an oil pipeline permit application submitted by Keystone XL.  The Keystone XL Pipeline is an expansion that would start in Hardisty, Alberta and extend south to a point in Port Arthur, Texas.  The Keystone XL pipeline project has been the subject of ongoing debate surrounding its potential environmental impacts.  The Department of State (“State Department”) is delegated authority under Executive Order 13337 to receive and act on Presidential permit applications for cross-border facilities like the Keystone XL Pipeline.

On November 10, 2011, the State Department announced that it could not make a national interest determination regarding the Keystone XL Pipeline permit application without additional information. On January 18, 2012, the State Department recommended to President Obama that the Keystone XL Pipeline permit be denied, and that it be determined not to serve the national interest.  The State Department had previously informed President Obama that their review would be complete by the first quarter of 2013.  The decision to deny the Keystone XL Pipeline permit came about as a result of the Temporary Payroll Tax Cut Continuation Act, which provided, in addition to other items, “not later than 60 days after enactment of this Act, the President, acting through the Secretary of State, shall grant a permit under Executive Order 13337…for the Keystone XL pipeline” and “[t]he President shall not be required to grant the permit…if the President determines that the Keystone XL pipeline would not serve the national interest.”   The State Department issued a statement that the denial of the permit application does not preclude subsequent permit applications.

TransCanada Corp., the developer of the Keystone XL Pipeline, plans to resubmit its application for the 1,700 mile pipeline project, and expects that their new application would be processed to allow for an in-service date in late 2014.

A copy of the President’s memo is available here.

A copy of the State Department’s Press Release is available here.