President Obama Rejects Keystone XL Pipeline
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SAUL LOEB/AFP/Getty Images(WASHINGTON) — The Obama administration on Wednesday formally rejected a bid by Canadian energy company TransCanada to build a $7 billion oil pipeline linking the tar sands of Alberta to refineries in the Gulf of Mexico.
The Keystone XL project, which was estimated to create thousands of U.S. jobs, became an election-year lightning rod, embroiling President Obama, congressional Republicans, labor unions and interest groups in a heated debate over jobs and the environment.
The State Department, which holds the authority to approve or reject pipelines that cross an international boundary, said in November that it would delay a decision on Keystone to allow for further study of the environmental impact along its 1,700-mile route.
Then in December, Congress tried to force the president to make a decision proposal within two months, tucking the mandate into the payroll tax cut bill that Obama ultimately signed into law.
But the president said Wednesday in a statement that the congressionally imposed deadline did not provide adequate time for the State Department to finish a customary review of the pipeline’s route through six states.
Sources say the administration’s decision effectively hits the reset button on a review process that has been underway for several years, but does not preclude TransCanada from resubmitting a proposal for reconsideration.
Labor unions, oil industry groups — even the president’s jobs council — have signaled support for the plan, which also has bipartisan backing on Capitol Hill. But environmental groups warned it would have a dangerous effect on ecosystems and human health, ratcheting up pressure on Obama to defer to his progressive base in an election year.
House Speaker John Boehner of Ohio, who has said pipeline construction would “create 100,000 new jobs,” warned that delaying the deal would mean losing jobs to China.
Meanwhile, environmental groups claimed victory over the oil industry, which had spent millions lobbying intensely for approval of the pipeline.
Administration officials have denied that politics played a role in the decision, citing established precedent for careful review of the environmental impact of major projects.
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