Obama to reject Keystone XL pipeline

The State Department has denied the proposed oil pipeline from Canada, heading off a congressionally mandated deadline of Feb. 21.

Wed, Jan 18 2012 at 1:53 PM EST

PIPE DREAMS: Environmentalist Bill McKibben (left) and other protestors rally against the Keystone XL oil pipeline outside the White House in November. (Photo: Tar Sands Action/Flickr)

UPDATE (3:30 p.m.): The Obama administration formally rejected the Keystone XL oil pipeline Wednesday, issuing a statement from President Obama explaining that GOP supporters of the pipeline forced his hand. Here's the statement:

"Earlier today, I received the Secretary of State's recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department's report, I agree.

"This announcement is not a judgment 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 and protect the American people. I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration's commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security — including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico — even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment."

The State Department also posted its own statement here, pointing out that its rejection of Keystone XL "does not preclude any subsequent permit application or applications for similar projects."

The Obama administration will reject the proposed Keystone XL oil pipeline, multiple news outlets are reporting this afternoon. Deputy Secretary of State William Burns is expected to make a formal announcement at 3 p.m.

While TransCanada's permit for the 1,700-mile pipeline would be turned down, the company could still plan and promote an alternative route through Nebraska, Politico reports. The Obama administration is acting ahead of a congressionally mandated Feb. 21 deadline to decide the pipeline's fate. President Obama criticized that deadline, which was pushed by Republicans on Capitol Hill, and has warned such an ultimatum could lead to a rejection.

Keystone XL — which would transport oil through the Great Plains from Alberta, Canada, to the Texas Gulf Coast — has become a political lightning rod in recent months, spurring debates from Winnipeg to Washington over its effect on job growth, energy policy and environmental health, among other issues.

Many Republicans and some labor unions favor the pipeline, arguing it would create jobs, reduce energy prices and curb U.S. dependence on overseas oil. But it sparked a wave of protest that surprised TransCanada, culminating with a series of large-scale demonstrations in Washington last year. Environmentalists say Keystone XL would deepen America's reliance on petroleum, and would also support Canada's oil sands, which are said to have an even larger carbon footprint than traditional oil sources.

"Assuming that what we're hearing is true, this isn't just the right call, it's the brave call," leading Keystone critic Bill McKibben said in a statement today. "The knock on Barack Obama from many quarters has been that he's too conciliatory. But here, in the face of a naked political threat from Big Oil to exact 'huge political consequences,' he's stood up strong. This is a victory for Americans who testified in record numbers, and who demanded that science get the hearing usually reserved for big money."

Republicans quickly mobilized a response, with many GOP leaders using Twitter to voice their displeasure. "Obama to nation: 'Take your jobs and shove them, take your energy security and shove it, I'm going to Disney World!'" Rep. Connie Mack, R-Fla., tweeted this afternoon. And speaking to Politico, a spokesman for House Speaker John Boehner, R-Ohio, vowed that "this is not the end of this fight."

The pipeline would carry a substance known as "diluted bitumen," which is more corrosive than conventional crude and has raised fears of oil spills — especially given the recent history of U.S. pipeline accidents. And because it would run through sensitive ecosystems in the Great Plains, namely Nebraska's Sand Hills, many scientists have warned a spill could be disastrous. In addition to ecological concerns, the State Department is also under investigation for potential conflicts of interest regarding the pipeline's approval process.

Check back for updates as the story develops.

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