Implementing Provisions of the Temporary Payroll Tax Cut Continuation Act of 2011 Relating to the Keystone XL Pipeline Permit

President Obama directed the Secretary of State to deny the Keystone XL pipeline permit application, determining it would not serve the national interest due to insufficient time (60 days mandated by Congress) to complete necessary environmental and policy reviews. The denial implemented a provision of the Temporary Payroll Tax Cut Continuation Act of 2011 while preserving the option for TransCanada to reapply.

Federal Register Open PDF 77 FR 5679

Impact dates

Feb 21, 2012
60-day determination deadline from enactment (December 23, 2011) per statute

Key directives

Submit report to Congress as specified in section 501(b)(2) of Temporary Payroll Tax Cut Continuation Act of 2011
Issue denial of Keystone XL pipeline permit application

Who is ordered

Secretary of State · Department of State

Timeline

Immediate

Denial of Keystone XL permit application
Submission of report to Congress per statute

Near term (90d)

—

Long term

Potential reapplication by TransCanada
Continued political debate over pipeline route through Nebraska
Eventual 2015 permit denial or 2017 approval depending on administration

Risks & tensions

Statutory deadline conflicted with State Department's stated need for review until Q1 2013; administration chose denial rather than approval under time pressure
Political backlash from Republicans and industry supporters expected
Document notes this does not preclude reapplication, suggesting tactical rather than permanent rejection
Nebraska routing concerns remained unresolved at time of denial