On January 18, with his signature, President Obama denied authorization of TransCanada Corp.’s Keystone XL pipeline route, delaying an already overdue transmission system meant to bring urgently needed Canadian crude to Gulf Coast refineries. Many of the refineries, such as Motiva Industries, have already ramped up their hydroprocessing and sulfur units to handle the increased capacities, and are once again disappointed by a delay.
Obama rejected permitting of the Keystone XL pipeline, stating that the project did not serve the national interest of the U.S.. The news comes less than one month after the President signed a bill extending payroll tax cuts which included a provision that required his administration to make a decision on the project within 60 days.
The President stated that there was not enough time to fully assess the project’s benefits given the 60-day timeframe in place.
"This outcome is one of the scenarios we anticipated,” said Russ Girling, TransCanada's president and chief executive officer. “While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL. Plans are already underway on a number of fronts to largely maintain the construction schedule of the project. We will re-apply for a Presidential Permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014."
In effect, this action by the President appears to "re-punt" the final decision until after the election, as TransCanada will still be authorized to submit an application on the project's alternative route. The company said it will continue to work with the Nebraska Department of Environmental Quality on alternative routes for the pipeline. They anticipate completing this work in September or October.
Says U.S. Chamber of Commerce president and chief executive Thomas J. Donohue,” It is dumbfounding that President Obama’s decision to deny the Keystone XL pipeline permit ignores his own Council on Jobs and Competitiveness “Road Map to Renewal” report [which] recommends that the U.S. step up its game on energy and construct pipelines to deliver fuel as a key component of our economic recovery,”
The 1,661-mile project, which would deliver production from the Canadian tar sands to the U.S. Gulf Coast, has had a rough road for the last year TransCanada anticipated that it would receive approval from the U.S. State Department by last fall.
However, a coalition of both environmentalists and concerned citizens and elected officials voice strong opposition to the project, which they said would harm the environment, specifically the Sand Hills region of Nebraska that has been deemed fragile.
This resulted in the Obama Administration announcing last fall that they were delaying their final decision on the project until first-quarter 2013 to study a new route through Nebraska that would re-route about 62 miles of pipeline to avoid the aforementioned environmentally sensitive region in the state.
The State Department said this extra time would allow it to fully assess the effects the construction would have on the environment as well as any potential benefits it would bring to the U.S.
Daniel J. Weiss, senior fellow and director of climate strategy at the Center for American Progress, said of the decision, “President Obama’s denial of the Keystone XL pipeline permit recognizes that Canadian tar sands oil is not the future of American energy. His insistence on knowing the impact before the pipeline is approved is the safest decision to protect Americans along its route by ensuring the pipeline won’t pollute their air and water before it’s reviewed by those with the expertise to conduct such an assessment without bias.”
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