Market News

 October 11, 2013
Government shutdown complicates State Department's Keystone study

 The government shutdown could slow the State Department's closely watched review of the proposed Keystone XL oil pipeline.

The State Department said Thursday that the shutdown is making it more difficult to coordinate with other agencies in its effort to finish a key environmental analysis of the controversial project.

A department official, in a carefully worded statement, would not say whether the shutdown will delay the release of the final supplemental environmental impact statement. But the official suggested that the shutdown, which lumbered into its 10th day Thursday, is complicating the department's review.

"Finalizing the draft SEIS involves work with consulting agencies to discuss and address their comments as appropriate, but most of those consulting agencies have had a large number of staff furloughed," the official said in the statement. "We cannot make any predictions on the timing -- we haven't before and can't now. We are working as best as we can under the circumstances to finalize the draft SEIS."

The State Department needs to coordinate with a number of other agencies, including EPA and the Interior Department, which have both raised concerns about a draft environmental analysis State released in March.

"The State Department continues to carry out its work to finalize the SEIS in an objective, rigorous, and transparent manner," the official said.

Republicans quickly pounced on the news, accusing the administration of seizing on any reason to postpone the politically charged decision.

"The president's failed leadership to negotiate with Republicans and reopen the government seems like a convenient excuse to delay making a decision on the Keystone XL pipeline," Larry Farnsworth, a spokesman for vocal Keystone supporter Rep. Lee Terry (R-Neb.), told POLITICO in an email. "But it doesn't have to be complicated. The president could just approve it."

State Department officials have been careful not to outline a specific timeline for releasing the final environmental analysis or reaching a final verdict on the pipeline.

But opponents and supporters of the project are eagerly awaiting the upcoming analysis in hopes it will give observers clues about which way the administration is leaning.

In its March draft analysis, the department said the pipeline would have little environmental impact. And it suggested the pipeline would not be a disaster for the climate, as opponents allege, because Canada's oil sands will be developed "with or without the proposed project."