Obama rejects Keystone XL project, citing climate concerns

6 Nov 2015 | Author: | No comments yet »

AP sources: Obama administration refuses permit for Keystone XL pipeline after 7-year review.

The Obama administration rejected TransCanada’s application to build the Keystone XL pipeline on Friday, three individuals familiar with the decision said, capping a seven-year saga that became an environmental flashpoint in both Canada and the U.S. Back in 2008, TransCanada first applied for a permit to build a pipeline extension that would help carry 800,000 barrels of crude oil per day from Canada and North Dakota down to refineries on the Gulf Coast. Killing the pipeline allows Obama to claim aggressive action on the environment, potentially strengthening his hand as world leaders prepare to finalize major global climate pact within weeks that Obama hopes will be a crowning jewel for his legacy.

Earlier in the week, the State Department said it would not pause its review of the pipeline proposal, despite a request from TransCanada, the project’s sponsor. Yet it also puts the president in a direct confrontation with Republicans and energy advocates that will almost surely spill over into the 2016 presidential election. The pipeline’s backers are expected to challenge his decision in court, and the Republican-controlled Congress may try to override the president, although those efforts have previously failed. Another open question is whether the Calgary-based energy giant will try to recoup the more than US$2 billion it says it has already spent on the project’s development.

The decision to deny TransCanada Corp. a cross-border permit for a 1,179-mile pipeline between Hardisty, Alberta, and Steele City, Neb. puts an end — at least for now — to a seven-year fight over a project that came to symbolize what Obama could do unilaterally to keep fossil fuels in the ground. The 1,900-kilometre proposed pipeline has been in limbo for more than seven years, awaiting a series of U.S. reviews that have dragged on more than five times longer than average, according to a recent Associated Press analysis. Obama forecast his reluctance to authorize the pipeline on Wednesday when his administration rejected TransCanada’s unusual request to suspend — but not withdraw — its application.

The White House suggested the move was aimed at delaying until Obama leaves office and is potentially replaced by a Republican, although TransCanada insisted that wasn’t the case. In an ABC interview last November, he said: “Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. Even that was a gamble: Hillary Clinton and Bernie Sanders have said they’d reject the pipeline, while Ben Carson, Jeb Bush, and Marco Rubio have said they’d approve it. But Republicans, Canadian politicians and the energy industry touted what they said were profound economic benefits — thousands of U.S. construction jobs and billions injected into the economy. They argued transporting crude by pipeline would be safer than alternatives like rail, and charged Obama with hypocrisy for complaining about the lack of investment in U.S. infrastructure while obstructing an $8 billion project.

For TransCanada, the financial imperative to build Keystone may have fallen off recently amid a sharp drop in oil prices that could make extracting and transporting the product much less lucrative.

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