Thursday, January 19, 2012

Obama rejects Keystone XL line from Canada, triggering controversy

WASHINGTON - The Obama administration on Jan. 18 denied a permit for the Keystone XL oil pipeline from Canada, touching off a torrent of criticism from Republicans, whom the White House blamed for forcing a decision.

President Barack Obama, who was under a 60-day deadline imposed by congressional Republicans, left open the door to approve the 1,661-mile pipeline in the future. He also suggested the possibility of an alternative pipeline that could get Canadian oil sands crude to refineries and ports in Texas.

The company that wants to build Keystone XL, TransCanada Corp., said on Jan. 18 that it would apply for a new permit which, if approved, would allow the pipeline to be built by late 2014.

Environmentalists had made the project a test case on whether the administration was serious about fighting climate change. And though Obama didn't rule out future pipelines, they declared victory.

Business groups, congressional Republicans and the GOP's presidential candidates hammered Obama for rejecting the project, which they said would create jobs.

In a statement, Obama said he was siding with his State Department and denying the permit because of a "rushed and arbitrary deadline" that congressional Republicans attached to a payroll tax-cut extension in December.

"This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people," Obama said.

Obama said his administration would "continue to look for new ways to partner with the oil and gas industry to increase our energy security," and he said that would include a potential pipeline from Cushing, Okla., to the Texas Coast. An existing Keystone pipeline from the oil sands ends at Cushing. Extending it could be an alternative way of getting the oil sands crude to the Gulf Coast.

The administration's decision was a delay, but not necessarily the end of the line, when it comes to linking Canada's oil sands with Texas. The State Department last summer said it found no major environmental problems with the pipeline, but later it changed course because of concerns about the pipeline's route through Nebraska's sensitive Sand Hills region and asked for a review of alternative routes.

TransCanada president Russ Girling said the company would reapply for a permit and "largely maintain the construction schedule of the project." He said a route would be found by October to avoid the Sand Hills.

But he charged that "until this pipeline is constructed," the U.S. will continue to import oil from "foreign countries who do not share democratic values Canadians and Americans are privileged to have. Thousands of jobs continue to hang in the balance if this project does not go forward."

White House Press Secretary Jay Carney, who spoke before the administration announced its decision, blamed Republicans for launching a "purely partisan effort to score a political point." He said the State Department had warned that forcing a decision within 60 days "would make it virtually impossible for an adequate review."

He said the concerns under review included environmental effects on air and water quality in Nebraska and a request by Nebraska's governor to consider an alternate route.

"We don't even have an alternate route identified yet, so how could anyone possibly review it thoroughly in the manner that is expected in this process?" he said.

Carney insisted Obama doesn't necessarily oppose the construction of pipelines.

"This president's commitment to expanding domestic oil and gas production is firm," he said.

Environmental groups opposed the Keystone XL pipeline chiefly because of climate change, but also because of the risk of oil spills. Canada's oil sands require more energy to extract and refine the crude, and that means a greater release of greenhouse gases than from refining conventional oil. They also argued that oil sands crude wouldn't improve energy security because it could be exported from Texas ports. 

President Barack Obama's rejection of TransCanada's Keystone XL pipeline demonstrates a "clear lack of leadership" and that politics played a role in the ruling, said Jack Gerard, president and CEO of the American Petroleum Institute. Gerard said that API would pursue all legal and legislative options to get the pipeline constructed. "These are serious national decisions that shouldn't be made on political whims. The president has fallen victim to a small group that is anti-oil and gas," he added.

President Barack Obama should overturn his decision to reject TransCanada's Keystone XL pipeline, several House Republicans said, arguing that otherwise job generation and the country's push for energy independence would be affected. "It's not too often that the president of the United States has the opportunity, with one swipe of his pen, to increase private sector jobs by thousands of employees, while at the same time increasing our energy independency and energy security," said Rep. Ben Quayle, R-Ariz. "This is the wrong decision at the wrong time," he added.

Republicans are studying alternative ways to get TransCanada's Keystone XL pipeline built after the Obama administration decided to reject the project. "This is not the end of the fight. Republicans in Congress will continue to push this because it is good for our country, it is good for the economy and it's good for the American people," said House Speaker John Boehner, R-Ohio.

The House Energy and Commerce Committee will hold a hearing next week on President Barack Obama's rejection of TransCanada's Keystone XL pipeline, and committee Chairman Fred Upton, R-Mich., has invited Secretary of State Hillary Clinton to testify. The State Department was in charge of the review of the project.

Republicans pushed President Barack Obama to reject TransCanada's Keystone XL pipeline when they shortened the decision-making schedule for the project, said House Minority Leader Nancy Pelosi, D-Calif. "If the Republicans care so much about the Keystone pipeline, they would not have narrowed the president's options by putting it on the time frame that they did," Pelosi said. "They left him very little choice."

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