Keystone deadline not necessarily a positive for pipeline

With the passage of the payroll tax cut extension last month, President Barack Obama has until late February to make an ultimate decision on the Keystone XL oil pipeline. However, Alberta Oil Magazine reports that the situation might not be as clear cut as some politicians would make it seem.

The rider on the payroll tax cut was ostensibly meant to force a clear decision from Obama, but Calgary-based investment group FirstEnergy Capital suggested in a recent investor note that the move "is nothing but negative for TransCanada as it makes the pipeline even more of a political issue, and it also means that the pipeline is still unlikely to receive approval until after the November 2012 election."

Large stockpiles of materials for pipelines could prove a burden for Keystone's owner, TransCanada, and the move most likely to result in approval would be for Obama to ignore the deadline entirely on the grounds that Congress cannot legislate that area of foreign policy.

The Keystone XL pipeline, designed to bring oil from tar sands in central Canada down to refiners on the Gulf Coast in the U.S. would run down the center of the nation.

But the pipeline has encountered heavy opposition both because of its impact on sensitive lands on its initial proposed route and because of opposition to energy-intensive tar sand oil operations.

Other information on planned oil pipelines can be found at PennEnergy's Research area.

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