The Obama administration has denied an energy infrastructure company’s request to build a pipeline across the northern border from Canadian oil sands to refineries along the U.S. Gulf Coast. A political battle is sure to come.
President Obama was compelled by Republicans in Congress to make a decision on TransCanada’s Keystone XL proposal by Feb. 21, potentially fast-tracking the project by several years. Oil from the pipeline would be sold on the international market.
The State Department and President beat Congress’s deadline, and concluded that the pipeline was not in the national interest; though, TransCanada will have the opportunity to re-apply.
The pipeline is a politically contentious issue, and House Republicans are planning to circumvent the President by attempting to use Congress’s Constitutional authority to regulate foreign commerce. The issue is also red meat for the GOP base, which has made Keystone's acceptance into its cause célèbre.
Arguments for and against Keystone XL are likely to carry over into the 2012 elections with Republicans seizing upon the President's decision to reinforce the narrative that his administration's policies are 'bad for job growth.'
The President's campaign is using Keystone's denial for his reelection. I just caught wind of an e-mail. Here's some of what it says:
"President Obama had made clear that a project of this magnitude -- with high stakes for public health, the environment, and our country's energy supply -- needed a thorough review. But Republicans in Congress demanded an up-or-down decision in just 60 days, cutting short a process that was already under way with an unreasonable deadline.
Our opponents have some powerful friends in the oil industry, and they're fighting back hard. Say you stand with the Obama administration's effort to protect the environment, develop our natural resources responsibly, and create jobs"
Proponents of TransCanada’s Keystone XL project say that it will create as many as 20,000 jobs, and while widely quoted, that figure is suspected of being badly inflated. Other reasons argued in favor of the pipeline are energy independence and lower gas prices.
The State Department’s estimate is a more conservative 5,000 to 6,000 jobs, and many jobs would be created outside of the United States. However, some labor unions in the United States favor the project and expressed disappointment with the administration.
Critics have taken a hard stance against the pipeline on the grounds that it would release an enormous volume of greenhouse gases into the atmosphere and damage environmentally sensitive areas. NASA scientist James Hansen has said that tapping the oil sands would be “essentially game over” for achieving a stable climate.
While the pipeline's rejection is a short term win for its opponents, rail and sea transportation remain viable options for exporting the oil. The Canadian government stands firmly behind the project, and argues that oil sands crude isn't any worse than other heavy crude imports.