President Obama, denouncing a “rushed and arbitrary deadline” set by congressional Republicans, announced Wednesday that he was rejecting a Canadian firm’s application for a permit to build and operate the Keystone XL pipeline, a massive project that would have stretched from Canada’s oil sands to refineries in Texas.
Obama said that the Feb. 21 deadline, set by Congress as part of the two-month payroll tax cut extension, made it impossible to adequately review the project proposed by TransCanada. But he left the door open to the possibility that a new proposal might pass regulatory muster.
“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,” the president said in a statement.
This is the second time the Obama administration has tried to deflect political pressure over the proposed $7 billion, 1,700-mile Keystone XL pipeline, which last year sparked debate over U.S. energy and environmental policy. At one point, about 12,000 people demonstrated outside the White House against the project, while the oil industry, construction unions and the Canadian government lobbied in favor of it.
The decision Wednesday and the language Obama used made clear that the White House, far from pushing off the issue until after the election, as it once hoped to do, was fully engaged in a battle with pipeline proponents. The president defended his administration’s record on energy security while pledging to protect the “health and safety” of Americans.
While the current Keystone XL permit application is dead, the pipeline might not be. The administration will allow TransCanada to reapply for a permit after it develops an alternate route around the Nebraska Sandhills, a sensitive habitat.
TransCanada’s chief executive, Russ Girling, issued a statement saying that the company will reapply and that he expects that “a new application would be processed in an expedited manner” so the pipeline could be carrying crude by late 2014. “While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL,” he said.
Kerri-Ann Jones, the State Department’s assistant secretary in the bureau of oceans and international environmental and scientific affairs, said that while “we would be able to draw on the information that’s out there,” if TransCanada files “a new application, it will trigger a new process.”
The administration’s move did nothing to delay a debate that could help define the campaign fight between Republicans and Democrats. Environmental groups have lobbied against the project, arguing that the extraction of oil sands — a process more akin to strip-mining than drilling — is so energy-intensive that it contributes to climate change. They also assert that the pipeline could leak, possibly endangering the giant Ogallala Aquifer, which provides drinking and irrigation water to much of the Great Plains.
Supporters of the pipeline say it would create jobs and enhance U.S. energy security by increasing reliance on a friendly neighbor. Canada, the largest source of U.S. crude oil imports, already exports oil to the United States from the Alberta oil sands through other pipelines. The Keystone XL, able to carry about 500,000 barrels a day, would enable Canada to raise its output.
The permit denial could complicate Obama’s already difficult task of winning support in Congress for his agenda this year.
“This is not the end of the fight,” House Speaker John A. Boehner (R-Ohio) said at a news conference. “Republicans in Congress will continue to push this because it’s good for our country, and it’s good for our economy, and it’s good for the American people, especially those who are looking for work.”
The House Energy and Commerce Committee said it will hold a hearing next Wednesday, inviting Secretary of State Hillary Rodham Clinton to explain the decision.
Leading congressional Democrats, however, rallied around the president. Rep. Henry A. Waxman (Calif.) said, “Today, the Obama administration rejected a dirty and dangerous tar sands oil pipeline, refusing to be bullied by the oil industry.”
Rep. Peter Welch (D-Vt.) said, “The Republicans are using, and will never stop using, Keystone as a political talking point,” adding that the administration, “to its credit . . . decided it will wage that battle during the campaign.”
The GOP presidential candidates wasted no time. Even before the formal announcement, front-runner Mitt Romney issued a statement accusing Obama of putting “politics ahead of sound policy.”
“He seems to have confused the national interest with his own interest in pleasing the environmentalists in his political base,” Romney said.