• Bloomberg


Advisers to Donald Trump are exploring ways he can greenlight the Keystone XL oil pipeline on the day he is sworn into office, including by rescinding a 48-year-old presidential order.

Two people familiar with Trump’s transition planning say the issue is actively being discussed, as the incoming president looks for ways to jump-start infrastructure development and deliver on a campaign promise to approve the pipeline that would connect Canadian oil sands with U.S. Gulf Coast refiners.

Although details are still being developed, the strategy hinges on Trump rescinding a 1968 executive order that put the State Department in charge of permitting border-crossing oil pipelines, said the people, who spoke on the condition they not be named discussing internal deliberations. That directive, issued by President Lyndon B. Johnson, assigned the State Department responsibility for determining whether proposed projects serve the “national interest.”

Trump’s actions wouldn’t guarantee the pipeline’s construction in the face of environmental opposition that helped keep it in limbo for years. “If Trump grants the permit, there will be a massive backlash, both on the ground and in the courts, that could tie this project up for years,” said May Boeve, executive director of the climate action group 350.org.

Legislation proposed in Congress also would shift responsibility for vetting any pipelines and power lines proposed to cross the U.S. border with Canada and Mexico, but Trump doesn’t need to wait for Capitol Hill.

He can rescind the Johnson-era executive order immediately, said Susan Dudley, director of the Regulatory Studies Center at George Washington University. As easily as presidents issue executive orders, they can rescind them, Dudley said.

Oil pipelines generally would still be subject to environmental review, even if the State Department isn’t involved. And TransCanada Corp. may need to submit another formal application to build Keystone XL. But the company’s plans to build Keystone XL already have been vetted, with years of environmental scrutiny culminating in President Barack Obama’s decision last year that the pipeline was not in the U.S. interest.

The Calgary-based company has not explicitly said it would reapply for permission to build the pipeline, but the day after Trump’s election, TransCanada said it was looking for ways to convince the new administration of the project’s benefits to the U.S. economy.

Environmentalists fiercely battled the project, making it a flash point in broader debates about U.S. energy policy and climate change. Landowners in the pipeline’s path warned that a spill of dense oil sands crude could contaminate the Ogallala aquifer, a source of drinking water that stretches from Texas to South Dakota. And activists said it would promote further development of oil sands in Alberta, Canada that generally require more energy to extract.

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