Obama rejects Keystone pipeline bid, draws broad criticism

18 January 2012 21:47  [Source: ICIS news]

WASHINGTON (ICIS)--President Barack Obama on Wednesday rejected the long-planned, multi-billion dollar Keystone XL pipeline project, and the decision drew quick condemnation from US energy, chemical and general manufacturing and business interests.

Obama had been facing a 21 February deadline mandated by Congress to decide whether the 1,700-mile (2,735 km) pipeline to bring crude oil from Canada to Texas refineries was in the US national interest.

The $7bn (€5.5bn) project would involve building a 36-inch (91 cm) pipeline across five US states, bringing crude to refineries in the US midwest as well as Texas and providing refined products to another half-dozen states.

In rejecting the project on Wednesday, Obama said that the deadline imposed by Congress “prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment”.

Obama said his decision to deny the permit application by pipeline project company TransCanada “is not a judgement 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”.

But American Petroleum Institute (API) president Jack Gerard charged that Obama was only appeasing a “small, shrill group of environmentalists that are just anti-oil and anti-gas”.

Gerard noted that the bill approved late last year by bipartisan votes in both the House and Senate only required that Obama decide the national interest issue by 21 February and specified that the US State Department and the Nebraska state government could take whatever time needed to further review the project.

The Nebraska government had asked to reconsider the pipeline route through its territory.

Gerard also pointed out that the Keystone project has been under review at the State Department for three years and had already been given environmental approvals by the Environmental Protection Agency (EPA).

Cal Dooley, president of the American Chemistry Council (ACC) called the Obama decision puzzling, troubling and short-sighted and said that denial of the Keystone project was “bad news for the nation’s chemistry industry, which needs reliable energy supplies”.

“The administration says it wants to enhance energy security and create jobs, in part by speeding permitting of new pipelines,” Dooley said, “but while rejecting a prime opportunity to do so.”

National Petrochemical & Refiners Association (NPRA) president Charles Drevna charged that Obama had "given in to political pressure from extremist opponents of fossil fuels and has turned his back on American consumers who need fuel, American workers who need jobs, and America's economic and national security".

Rejecting the Keystone project, said Drevna, "may be good politics to appeal to fringe protest groups, but it is bad policy for the American people".

Jay Timmons, president of the National Association of Manufacturers (NAM), said that “The president’s rejection of the Keystone XL project is a serious blow to job creation and a major setback to energy security”.

Noting that the Keystone project was expected to generate up to 200,000 jobs in the US, Timmons said the White House decision “defies logic when the US is suffering from high unemployment and a struggling economy”.

The US Chamber of Commerce also was sharply critical of Obama’s decision, saying it was “dumbfounding”.

“This political decision offers hard evidence that creating jobs is not a high priority for this administration,” said chamber president Thomas Donohue.

“The president’s decision sends a strong message to the business community and to investors: keep your money on the sidelines, America is not open for business,” Donohue added.

API’s Gerard said his organisation would work with a bipartisan group in Congress seeking ways to circumvent Obama’s rejection of the project.

($1 = €0.79)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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