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The Obama administration just announced the rejection of the controversial $7 billion Keystone Pipeline. Juliet Eilperin of The Washington Post, first broke the news that the State Department, which led the review of the project, would reject a permit for the pipeline.The rejection is expected to come from the State Department which has led the review of the project. Transcanada will however be able to reapply with an alternate route going through Nebraska.
President Obama had initially delayed the decision till after the 2012 Presidential election. Congress however mandated that there be a decision on the pipeline by February 21, as part of the negotiations on the payroll tax cut extension.
Two phases of the Keystone Pipeline are already complete. It is the 1,661 mile Keystone Gulf coast expansion project that is under review.
Recently, White House Press Secretary Jay Carney had this to say about the delay in the project:
“The State Department runs this process, as you know, which is a precedent that long predates this administration. The delay in the review was a result of concerns in Nebraska about the route by which the pipeline was meant to take — the route the pipeline was meant to take through Nebraska and how it would affect the aquifer there — concerns that were expressed by a number of stakeholders there, including the Republican governor of Nebraska.
When the State Department decided that those concerns were legitimate and there needed to be an alternate route, that began another process, and this process requires the careful weighing of a variety of criteria, and that has always been the case.
Everyone — a lot of people, and certainly we made clear back in December that a political effort to short-circuit that process for ideological reasons would be counterproductive because a proper review that weighed all the important issues in this case could not be achieved in 60 days — according to the State Department, which, again, runs this review process..”
Why the controversy?
The project has been the subject of a heated debate. One the one hand, those in favour of the pipeline point to the 8.5% unemployment rate, and argue that it could create much-needed, high-paying jobs, and it would provide cash-strapped governments with tax revenue. Moreover, Transcanada has warned that if if the U.S. continues to waver on the subject, it would reroute the pipeline to the West Coast and sell the oil to China.
On the other, after the BP Deepwater spill of 2010, and ExxonMobil’s July 2011 pipeline spill, environmentalists are pressuring the Obama administration to nip the project in the bud.
The NRDC and Oil Change International today released a report that says the Keystone XL Pipeline will not protect America’s energy interests, rather it will maximise the profits of “Big Oils”. From the report:
“Keystone XL’s backers want to re-direct tar sands oil from the American Midwest to reach the international market where tar sands oil would fetch a higher price. The Keystone XL pipeline would thus add billions of dollars to their annual profits while raising the cost of oil for millions of American consumers in the U.S. heartland.
There are clear alternatives to allowing the United States to be to be an oil conduit merely to accommodate ever- growing profits for big oil companies. As American gasoline consumption continues to shrink, the United States can continue its current trajectory to reduce its oil dependency by making further clean energy investments to improve fuel efficiency and replace oil with environmentally sound renewable fuels. These investments will create tens of thousands more jobs than Keystone XL would without the risk of major oil spills.
…The debate surrounding Keystone XL has obscured the fact that Canada does not produce enough tar sands to fill exist- ing pipelines…”