Obama Administration Rejects Keystone XL Pipeline
To no real surprise, the Obama Administration has rejected the application to approve the Keystone XL Pipeline. It is likely to remain an issue in the upcoming Presidential campaign, though.
In a move that in the end surprises nobody, the Obama Administration has rejected the application to approve the Keystone XL Pipeline that would have brought oil extracted from regions in Alberta, Canada and potentially the Dakotas to refineries in the southern United States:
WASHINGTON — President Obama on Friday announced that he had rejected the request from a Canadian company to build the Keystone XL oil pipeline, ending a seven-year review that had become a flash point in the debate over his climate policies.
Mr. Obama’s denial of the proposed 1,179-mile pipeline, which would have carried 800,000 barrels a day of carbon-heavy petroleum from the Canadian oil sands to the Gulf Coast, comes as he is seeking to build an ambitious legacy onclimate change.
“The pipeline would not make a meaningful long-term contribution to our economy,” the president said in remarks from the White House.
The move was made ahead of a major United Nations summit meeting on climate change in Paris in December, when Mr. Obama hopes to help broker a historic agreement committing the world’s nations to enacting new policies to counter global warming. While the rejection of the pipeline is largely symbolic, Mr. Obama has sought to telegraph to other world leaders that the United States is serious about acting on climate change.
The once-obscure Keystone project became a political symbol amid broader clashes over energy, climate change and the economy. The rejection of a single oil infrastructure project will have little impact on efforts to reduce greenhouse gas pollution, but the pipeline plan gained an outsize profile after environmental activists spent four years marching and rallying against it in front of the White House and across the country.
The rejection of the pipeline is one of several actions Mr. Obama has taken as he intensifies his push on climate change in his last year in office. In August, he announced his most significant climate policy, a set of aggressive new regulations to cut emissions of planet-warming carbon pollution from the nation’s power plants.
Republicans and the oil industry had demanded that the president approve the pipeline, which they said would create jobs and stimulate economic growth. Many Democrats, particularly those in oil-producing states like North Dakota, also supported the project. In February, congressional Democrats joined with Republicans in sending Mr. Obama a bill to speed approval of the project, but the president vetoed the measure.
Both sides saw the Keystone rejection as a major symbolic step, a sign that the president was willing to risk angering a bipartisan majority of lawmakers in the pursuit of his environmental agenda. And both supporters and critics of Mr. Obama saw the surprisingly powerful influence of environmental activists in the decision.
“Once the grass-roots movement on the Keystone pipeline mobilized, it changed what it meant to the president,” said Douglas G. Brinkley, a historian at Rice University who writes about presidential environmental legacies. “It went from a routine infrastructure project to the symbol of an era.”
Environmental activists cheered the decision as a vindication of their influence. They had sought to block construction of the pipeline because it would have provided a conduit for petroleum extracted from the Canadian oil sands. The process of extracting that oil produces about 17 percent more planet-warming greenhouse gases than the process of extracting conventional oil.
But numerous State Department reviews concluded that construction of the pipeline would have little impact on whether that type of oil was burned, because it was already being extracted and moving to market via rail and existing pipelines.
“From a market perspective, the industry can find a different way to move that oil,” said Christine Tezak, an energy market analyst at ClearView Energy Partners, a Washington firm. “How long it takes is just a result of oil prices. If prices go up, companies will get the oil out.”
However, a State Department review also found that demand for the oil sands fuel would drop if oil prices fell below $65 a barrel, since moving oil by rail is more expensive than using a pipeline. An Environmental Protection Agency review of the project this year noted that under such circumstances, construction of the pipeline could be seen as contributing to emissions, since companies might be less likely to move the oil via expensive rail when oil prices are low — but would be more likely to move it cheaply via the pipeline. The price of oil has plummeted this year, hovering at less than $50 a barrel.
The recent election of a new Canadian prime minister, Justin Trudeau, may also have influenced Mr. Obama’s decision. Mr. Trudeau’s predecessor, Stephen Harper, had pushed the issue as a top priority in the relationship between the United States and Canada, personally urging Mr. Obama to approve the project. Blocking the project during the Harper administration would have bruised ties with a crucial ally. While Mr. Trudeau also supports construction of the Keystone pipeline, he has not made the issue central to Canada’s relationship with the United States, and has criticized Mr. Harper for presenting Canada’s position as an ultimatum, while not taking substantial action on climate change related to the oil sands.
This move comes just a few days after TransCanada, the company behind the pipeline, requested a delay in the review process while it negotiated leases for an altered route through Nebraska, however the State Department quickly rejected that request. At that point, the handwriting was on the wall and the outcome of the review process seemed self-evident. From the beginning, it has been clear that he Administration was at best reluctant about the entire Keystone project. In no small part, this was due to the President’s own focus on climate change issues and the initiatives he has made from the start of his Presidency regarding pursuing alternative forms of energy development, something that he has attempted to work together on with the leaders of Canada and Mexico. Additionally, the rising influence of the environmentalist lobby inside the Democratic Party meant that there has been pressure on the Administration from the beginning to reject the project. On the other side of the equation, though, there are union interests that have been strong supporters of the project that are a powerful force inside the party, and the fact that the economy was slow for much of Obama’s Presidency, combined with oil prices that were high enough to make extracting the oil in Alberta and the Dakota very profitable made it difficult to reject the project outright. For this reason, the Administration delayed its consideration of the project several times over the course of the past six years, with several delays announced just before the midterm and Presidential elections.
Throughout the entire process, though, the outcome seemed as though it was inevitable. Many expected the rejection to come after the 2012 Presidential election, or the 2014 midterms, but the fact that the Administration continued to delay making a decision was a strong indication of the differing political forces involved in the issue. Ultimately, it may have been the fact that worldwide oil prices have dramatically declined in the past year or so and that former Secretary of State Hillary Clinton recently came out against the project suggested that whatever political risk the President may have been taking in rejecting the project were no longer as severe as they might have been. Additionally, there was some anticipation that the President would make an announcement regarding this project before leaving to attend the international conference on climate change taking place in Paris next month. So, this being a Friday after the announcement of a very positive jobs report, announcing the decision is not entirely surprising.
Not surprisingly, Republicans are ripping the Administration’s decision:
Republican presidential candidates reacted forcefully to President Obama’s announcement rejecting the construction of TransCanada’s Keystone XL pipeline Friday, calling it politically motivated acquiescence to environmentalists and damaging the U.S. economy.
Florida Sen. Marco Rubio blasted the decision as a “huge mistake.”
“When I’m president, Keystone will be approved, and President Obama’s backwards energy policies will come to an end,” Rubio tweeted.
“The Obama Admin’s politically motivated rejection of the Keystone XL Pipeline is a self-inflicted attack on the U.S. economy and jobs,” former Florida Gov. Jeb Bush tweeted Friday shortly after news broke about the decision
[Reactions from other Republican candidates for President can be found in embedded Tweets at the link — DM]
Meanwhile, Bernie Sanders applauded the decision.
“Climate change is a global environmental crisis of huge magnitude. It is insane for anyone to be supporting the excavation and transportation of some of the dirtiest fuel on earth,” the independent Vermont senator and Democratic presidential candidate said in a statement. “As someone who has led the opposition to the Keystone pipeline from Day 1, I strongly applaud the president’s decision to kill this project once and for all.”
His chief opponent, Hillary Clinton, announced her opposition to the pipeline in September after a long silence on the issue.
We can expect that this decision, and Clinton’s support of it, will become an issue going forward. Guided in no small part by polling that indicates the American public has been largely in favor of the project, Republicans will continue to hit the Administration and the Clinton campaign for their opposition to the project. The additional possibility of pealing away some support of union members from Clinton over this issue will also likely play a role in swing states such as Ohio and other places in the Midwest. Additionally, the fact that the Canadian government continues to support the project even under the leadership of Justin Trudeau, the Liberal Party leader who was sworn into office just this week, will lead to some charges that the Administration is alienating one of our closest allies. TransCanada and the other pipeline interests, meanwhile, will likely sit on the sidelines to some degree waiting to see what happens in the 2016 elections. If a Republican wins the Presidency, they will most assuredly renew the application process. Additionally, future changes in the world oil markets could very well change the nature of the pressures and incentives facing whomever becomes President in January 2017. In other words, the Keystone XL pipeline is for the time being dead as a project, and may well be dead forever, but it will remain as a political issue going forward.