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Greens ask U.S. to delay Keystone decision after Arkansas leak

Spilled crude oil is seen in a drainage ditch near Starlite Road in Mayflower, Arkansas March 31, 2013. REUTERS/Jacob Slaton
Spilled crude oil is seen in a drainage ditch near Starlite Road in Mayflower, Arkansas March 31, 2013. REUTERS/Jacob Slaton

By Timothy Gardner

WASHINGTON (Reuters) - Environmental groups on Monday asked the Obama administration to extend the approval process of the Keystone XL pipeline, using last month's spill of heavy Canadian crude oil in Arkansas as their latest reason to delay the project.

The Obama administration is deciding whether to approve the Canada-to-Nebraska leg of TransCanada Corp's proposed pipeline, which would link Canada's oil sands, the world's third richest crude oil deposit, to refineries in Texas.

The State Department, which issued a draft environmental assessment of the $5.3 billion project on March 1, indicated then that a final decision could come by July or August.

The assessment is now in a 45-day public comment period that runs through April 22. Then the administration has 90 days to decide whether the project is in the national interest.

Leading green groups, including the Sierra Club, the Natural Resources Defense Council, and 350.org, asked the agency to prolong the comment period to 120 days after a pipeline spilled thousands of barrels of Canadian crude in a suburban neighborhood in Mayflower, Arkansas in late March.

The State Department did not immediately respond to the request for comment about the letter.

Exxon Mobil Corp's Pegasus pipeline, which runs from Illinois to Texas and can transport more than 90,000 barrels per day, remains shut after 22 homes were evacuated as a result of the oil-spill.

"A 45-day comment period ... is entirely inappropriate in light of so many unanswered questions surrounding the Mayflower disaster," the letter said. The 800,000 barrel per day Keystone pipeline would be far larger than Pegasus.

President Barack Obama is expected to be the final arbiter on the Keystone decision, which splits important parts of his base: environmentalists, who are mostly opposed, and organized labor, which has backed the pipeline and the construction jobs it is likely to create.

Environmentalists say that oil sands petroleum and diluted bitumen from Canada is corrosive to pipelines. Pegasus was carrying diluted bitumen at the time of the leak, but it was not from the oil sands.

The State Department assessment on Keystone said Canadian crude is no worse than other heavy crudes transported by pipeline, but added more study is forthcoming.

The National Academies of Sciences is expected to release a study in July on whether oil sands crude causes more pipeline leaks than conventional crudes.

The southern half of the Keystone project, which did not require a State Department permit because it does not cross the national border, is more than half built.

As the administration decides whether the northern half should move forward, U.S. lawmakers are trying to take the decision out of the hands of the administration.

In the House of Representatives, backers of the pipeline hope a bill that would allow Congress to decide the fate of the line would be voted on before the end of May. The House Energy Committee will hold a hearing on the merits of the line on Wednesday.

Supporters of the pipeline have a similar bill in the Senate, but it is unclear when it would come to a vote. Lawmakers would likely try to attach the measure to must-past legislation that Obama would find hard to oppose.

(Reporting by Timothy Gardner; editing by Ros Krasny and Theodore d'Afflisio)

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