WASHINGTON — The Obama administration on Wednesday rejected a permit for the Keystone XL pipeline that promised 1,200 construction jobs for Oklahoma, but President Barack Obama said he would look at ways to develop an oil pipeline from Oklahoma to the Gulf of Mexico.
The administration's decision on the pipeline came well ahead of the Feb. 21 deadline given by Congress last month.
The president wanted to delay a decision until early next year, but Congress — led by Republicans who support the pipeline — forced his hand with a provision in the bill that temporarily extended the payroll tax cut.
The decision announced Wednesday that the pipeline is not in the national interest doesn't prevent TransCanada, which proposed the pipeline, from reapplying once an alternate route is found through Nebraska.
The administration said in November that public concerns about the passage of the pipeline through the ecologically sensitive Sandhills region of Nebraska prompted the delay.
Because the 1,700-mile pipeline would cross the Canadian border into the United States, the State Department had the permitting authority. The department recommended Wednesday that the permit not be approved, and Obama agreed.
“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,” the president said.
“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.”
Company will reapply
In a statement, TransCanada said it would reapply for a permit for the pipeline, which would carry crude from the tar sands region of Alberta, Canada, through Oklahoma, to the Texas Gulf Coast.
“This outcome is one of the scenarios we anticipated,” said Russ Girling, TransCanada's president and chief executive officer.
“While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL. Plans are already under way on a number of fronts to largely maintain the construction schedule of the project. We will reapply for a presidential permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014.”
The company, which has estimated the pipeline would create 20,000 jobs just for the construction, said it would work with Nebraska's Department of Environmental Quality to determine a route that avoids the Sandhills, a process that could be completed this fall.
However, Assistant Secretary of State Kerri-Ann Jones told reporters that a new application would require “a completely new review process,” even though the pipeline has been under review for three years.
“I can't say that anything would be expedited,” Jones said.
Connection to Cushing
The Keystone XL pipeline would connect to the crude oil storage hub in Cushing. Supporters say it would relieve the glut created by a lack of pipeline capacity.
In his statement on Wednesday, Obama specifically mentioned the hub, saying, “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.”
After the administration announced in November that it would delay a decision until 2013, a TransCanada official said the company could start building the segment from Cushing to the Gulf Coast as it awaited final approval of the other segment.
Gov. Mary Fallin said Wednesday, that if Obama is serious about the Cushing segment, “Then I call upon the president to say it's shovel-ready today.”
The governor said, “TransCanada has told me they could start tomorrow on the pipeline from Cushing down to the Gulf Coast. If he wants to create jobs, if he wants to help the marketplace, then start tomorrow in Cushing on down to the Gulf Coast.”
Fallin and other state leaders, including members of Oklahoma's congressional delegation, blasted the president's decision, and House Republican leaders said they had not given up. The head of the House Energy and Commerce Committee said Secretary of State Hillary Clinton will be invited to testify at a hearing next week on the pipeline.
Sen. Jim Inhofe, R-Tulsa, said Obama “sided with his radical environmental friends and their job-killing global warming agenda instead of a majority of the American people who would have welcomed the tens of thousands of jobs the Keystone pipeline would have created.”
Some Democrats said Republicans were to blame for forcing an expedited decision. And environmental groups, which contend the pipeline would carry dirty crude and pose environmental risks along the route, hailed the decision.
Larry Schweiger, president and CEO of the National Wildlife Federation, said, “Big Oil wants to ram this pipeline down the throats of American families in their insatiable appetite for more profits. Keystone XL is a scam. Canada would get the jobs, China would get the oil and America would get spills of toxic tar sands oil.”