UPDATED WITH STATEMENT FROM NATURAL RESOURCES MINISTER JOE OLIVER (at bottom)
United States President Barack Obama rejected Canada’s bid to build a massive pipeline to carry oil from the Alberta oilsands through six states to refineries in Texas. But is the project actually dead or has little about the pipeline’s fate changed?
Obama told Prime Minister Harper on Wednesday that Canada is free to re-apply, since the decision was based more on how much time the State Department had to review of the proposal, rather than on the merits of the proposal itself.
Weighing potential environmental impacts in Nebraska, Obama’s administration said in November it wanted to see an alternate route proposed. It would be 2013 – after this year’s presidential election — by the time that route could be designed, proposed, evaluated and decided on, Obama said.
So Republicans, through December’s payroll tax cut extension, imposed a Feb. 21 deadline to make a decision. From that party’s point of view, Keystone would create thousands of jobs, stimulate the economy and was of unquestionable benefit to the United States.
Rejecting the “arbitrary” deadline and inviting Canada to re-apply has kept the deadline for the contentious pipeline down the road, past the election, ensuring the project remains a hot topic during the presidential race.
Here is the raw, unedited political reaction from today:
From the Prime Minister’s Office:
Earlier this afternoon, Prime Minister Stephen Harper received a phone call from Barack Obama, President of the United States. President Obama informed the Prime Minister of his Administration’s decision to turn down TransCanada’s application to build and operate the Keystone XL pipeline.
The President explained that the decision was not a decision on the merits of the project and that it was without prejudice, meaning that TransCanada is free to re-apply. Prime Minister Harper expressed his profound disappointment with the news. He indicated to President Obama that he hoped that this project would continue given the significant contribution it would make to jobs and economic growth both in Canada and the United States of America.
The Prime Minister reiterated to the President that Canada will continue to work to diversify its energy exports.
(The above was emailed to the media).
From the U.S. State Department:
Denial of the Keystone XL Pipeline Application
Office of the Spokesperson
January 18, 2012
Today, the Department of State recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest. The President concurred with the Department’s recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest.
Since 2008, the Department has been conducting a transparent, thorough, and rigorous review of TransCanada’s permit application for the proposed Keystone XL Pipeline project. As a result of this process, particularly given the concentration of concerns regarding the proposed route through the Sand Hills area of Nebraska, on November 10, 2011, the Department announced that it could not make a national interest determination regarding the permit application without additional information. Specifically, the Department called for an assessment of alternative pipeline routes that avoided the uniquely sensitive terrain of the Sand Hills in Nebraska. The Department estimated, based on prior projects of similar length and scope, that it could complete the necessary review to make a decision by the first quarter of 2013. In consultations with the State of Nebraska and TransCanada, they agreed with the estimated timeline.
On December 23, 2011, the Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 (“the Act”). The Act provides 60 days for the President to determine whether the Keystone XL pipeline is in the national interest – which is insufficient for such a determination.
The Department’s denial of the permit application does not preclude any subsequent permit application or applications for similar projects.
From U.S. President Barack Obama:
The White House
Office of the Press Secretary
For Immediate Release January 18, 2012 Statement by the President on the Keystone XL Pipeline
Earlier today, I received the Secretary of State’s recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree.
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. I’m disappointed that Republicans in Congress forced this decision, but it does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security –including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico – even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment.
Minister of Natural Resources Joe Oliver:
January 18, 2012
Statement by the Honourable Joe Oliver, P.C., M.P., , on the Keystone XL Pipeline
OTTAWA, ONTARIO–( Jan. 18, 2012) – “We are obviously disappointed with today’s announcement regarding the Keystone XL pipeline.
This project would create thousands upon thousands of jobs both in the US and Canada and would contribute to energy security in the US. We continue to believe this project is in the best interests of both countries.
Our Government respects the right of the United States to make its own decisions.
However, it is clear that the process is not yet over and we are hopeful that this project will be approved in the future based on its merits.
Canada and the United States enjoy the single most important energy relationship in the world. We will continue to work with the US to further strengthen energy security for both our nations.
Meanwhile, our Government is moving ahead on creating jobs and economic prosperity for all Canadians.
The responsible development of the enormous resources provided by our oil sands is expected to create hundreds of thousands of jobs spread across the country, generating significant economic benefits.
We cannot understate the fact that these benefits fund critical services for Canadians, including health care and education.
99% of our oil exports currently flow to the United States. Today’s decision by the Obama Administration underlines the importance of diversifying and expanding our markets, including the growing Asian market, to help ensure the financial security of Canadians and families for decades to come.”