New setback for Keystone XL as ‘special review’ of Obama conflict of interest is ordered

CNN reports just a few weeks ago analysts thought the jobs – 20,000 during the building phase alone – and economic benefits would easily outweigh environmental concerns and push the Obama administration to approve Keystone XL.

But now, after a summer of protests culminating in Sunday’s 10,000 strong White House encirclement and on top of Nebraska’s vow to force a rerouting, the US State Department’s inspector general on Monday ordered a “special review” of the Obama administration’s handling of Keystone XL. The review follows complaints from members of Congress that the process has been tainted by conflicts of interest.

The National Post reports in a letter released Monday, the inspector general’s office said it would examine whether there had been any breach of “federal laws and regulations” in the State Department’s handling of its environmental-impact study of the pipeline.

CNN reports protesters, concerned about green house gas emissions associated with Canada’s oil sands and doubtful of its promised benefits, have been rallying against the project all summer. On Sunday, as many as 10,000 joined hands and literally encircled the White House.

FoxBusiness reports Canadian Natural Resources Minister Joe Oliver said on Monday he is “cautiously optimistic” Washington’s decision on Keystone XL will be “positive,” and remains hopeful it will come this year. reported last week on the increasing bitterness on the left about Obama’s perceived closeness to industry and what they see as his failure to honour environmental promises.

Many former campaign donors are now threatening to withdraw financial support if he fails to block Keystone XL and putting off the decision – hinted at by the US State Department – should not come as a surprise to anyone following Obama’s poll numbers.

TransCanada Corporation (TSX, NYSE: TRP), the company behind the $7 billion project, a week ago released two detailed memoranda that analyzed the legalities of the Nebraska legislature introducing pipeline siting legislation in the coming weeks. The analyses found that introducing such legislation at this point in the approval process for Keystone XL would be unconstitutional. TransCanada was trading down 1.7% late on Monday amid a generally positive day on the markets.


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