(Adds position of presidential candidates)
By Valerie Volcovici and Nia Williams
WASHINGTON/CALGARY, Nov 2 (Reuters) - The Canadian company
behind the proposed Keystone XL pipeline on Monday asked the
U.S. government to suspend review of the $8 billion project that
sparked a political war between environmentalists and the oil
industry, a move that could put its fate in the hands of the
next U.S. president.
TransCanada Corp 's TRP.TO move was seen by many as an
attempt to avert a rejection from an increasingly
environmentally focused President Barack Obama and postpone the
decision until after the November 2016 presidential election.
Democratic front-runner Hillary Clinton has said she opposes
the pipeline while many Republican candidates support the
project for making America less reliant on the Middle East.
Calgary-based TransCanada said it had sent a letter to the
U.S. State Department to suspend its application while the
company goes through a state review process in Nebraska.
The State Department was reviewing TransCanada's request but
still assessing the project, a representative said.
The nearly 1,200-mile (2,000-km) pipeline would carry
830,000 barrels a day of mostly Canadian oil sands crude to
Nebraska en route to refineries and ports along the U.S. Gulf
Coast.
Green groups issued a blizzard of statements describing
TransCanada's move as a desperate attempt to avoid a "no"
decision, and urging the president to kill the project anyway.
Democrats hours after the move sent an email urging supporters
to sign an online petition to fight climate change.
In addition to political headwinds, U.S. crude prices CLc1
have plunged to $50 a barrel from almost $150 when TransCanada
filed a federal application in 2008. The project also faces
several lawsuits.
In the past year a global rout has slashed oil prices by
more than 60 percent, prompting drillers to curtail spending and
rein in new projects. Companies operating in Canada's oil sands
where production costs are high have been hard-hit by the market
conditions. Further postponing Keystone deals an additional blow
to these producers who have limited pathways to bring their oil
to U.S. markets.
The request for a delay came on the eve of TransCanada
issuing an earnings report, and shortly after the White House
said it still expected Obama to make a decision on whether to
grant the permit before he leaves office in January 2017.
Asked if TransCanada was asking for a delay because of
concerns Obama may block the pipeline, TransCanada spokesman
Mark Cooper said the company was not going to speculate on what
the decision may be or when it may come.
KEYSTONE A SYMBOL
TransCanada's request provoked a sharp reaction from
environmental groups, which have made Keystone a symbol of their
battle to keep crude oil in the ground. Canadian oil sands have
long been under fire from environmentalists because of their
carbon-intensive production process.
"TransCanada acknowledged the writing on the wall by
requesting to suspend the review of its permit application,"
said a statement issued by Tom Steyer, the billionaire green
activist who heads NextGen Climate. "Today, tomorrow or next
year, the answer will be the same: Keystone XL is a bad deal for
America, our climate, and our economy."
The pipeline's defenders tried to rally on Monday. North
Dakota Senator Heidi Heitkamp, a Democrat, said "halting a basic
infrastructure expansion project will not make this country more
energy efficient or independent, but it does set a foreboding
precedent about our ability to achieve those goals."
Republican candidates Ben Carson, Marco Rubio and Jeb Bush
have said they support the pipeline. Donald Trump said in
October that the United States needed a "better deal" from the
pipeline's developer. In the past, he said he would approve the
project immediately if he wins the election.
But environmental groups argued that TransCanada was simply
playing for time - and the hopes that might come with a new
president.
"TransCanada rightly sensed that the tide has turned against
Keystone XL and now they're trying to delay any decision in the
hopes that they can get a Republican president to approve it,"
said Valerie Love with the environmental group Center for
Biological Diversity. She urged Obama to reject the appeal and
the pipeline.
Even investors were caught by surprise.
"Though I didn't see this coming it would seem to me to be
an admission that they are giving up on the Obama
administration," Ryan Bushell, a portfolio manager with Leon
Frazer & Associates, which owns a significant position in
TransCanada. "Not sure what this means for the stock if
anything, but it's disappointing for the industry."
TransCanada's stock was little changed in after-hours
trading.
(Writing by Bruce Wallace; Additional reporting by Euan Rocha
in Toronto and Jessica Resnick-Ault in New York; Editing by
Jeffrey Hodgson, Peter Henderson and Lisa Shumaker)