Monday, January 23, 2012

President Denies Keystone XL Pipeline; TransCanada Will Re-Apply

Jan 18: The Department of State (DOS) recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline [See WIMS 1/6/12] be denied and, that at this time, "the TransCanada Keystone XL Pipeline be determined not to serve the national interest." The President concurred with the Department's recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest. The Department emphasized that its denial of the permit application does not preclude any subsequent permit application or applications for similar projects.

    In an announcement DOS indicated that since 2008, it has been conducting a "transparent, thorough, and rigorous review of TransCanada's permit application for the proposed Keystone XL Pipeline project." As a result of this process, particularly given the concentration of concerns regarding the proposed route through the Sand Hills area of Nebraska, on November 10, 2011, the Department announced that it could not make a national interest determination regarding the permit application without additional information. Specifically, the Department called for an assessment of alternative pipeline routes that avoided the uniquely sensitive terrain of the Sand Hills in Nebraska. The Department estimated, based on prior projects of similar length and scope, that it could complete the necessary review to make a decision by the first quarter of 2013. DOS said, "In consultations with the State of Nebraska and TransCanada, they agreed with the estimated timeline."

    On December 23, 2011, the Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 (the Act). The Act included a rider that provided 60 days for the President to determine whether the Keystone XL pipeline is in the national interest. DOS said the allotted time was "insufficient for such a determination."

    The President issued a brief statement on the DOS decision and said, "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 President issued a "Presidential Memorandum -- Implementing Provisions of the Temporary Payroll Tax Cut Continuation Act of 2011 Relating to the Keystone XL Pipeline Permit." In the Memorandum, the President indicates, "I have determined, based upon your recommendation, including the State Department's view that 60 days is an insufficient period to obtain and assess the necessary information, that the Keystone XL pipeline project, as presented and analyzed at this time, would not serve the national interest. . . I direct you to submit the report to the Congress as specified in section 501(b)(2) of the Temporary Payroll Tax Cut Continuation Act of 2011 and to issue a denial of the Keystone XL pipeline permit application."
    TransCanada Corporation the developer of the project issued a statement saying it had received the DOS decision that the Presidential Permit for Keystone XL had been denied. Russ Girling, TransCanada's president and chief executive officer said, "This outcome is one of the scenarios we anticipated. 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." The company said it expects that consideration of a renewed application would make use of the exhaustive record compiled over the past three plus years.

    Girling continued saying, "Until this pipeline is constructed, the U.S. will continue to import millions of barrels of conflict oil from the Middle East and Venezuela and other foreign countries who do not share democratic values Canadians and Americans are privileged to have.  Thousands of jobs continue to hang in the balance if this project does not go forward. This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed." TransCanada said it will continue to work collaboratively with Nebraska's Department of Environmental Quality on determining the safest route for Keystone XL that avoids the Sandhills. This process is expected to be complete in September or October of this year.

    TransCanada has committed to a project labor agreement with the Laborers International Union of North America, the International Brotherhood of Teamsters, the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada, AFL-CIO, the International Union of Operating Engineers and the Pipeline Contractors Association. The company said, "Any delay in approval of construction prevents this work from going to thousands of hard-working trades people. Girling added that TransCanada continues to believe in Keystone XL due to the overwhelming support the project has received from American and Canadian producers and U.S. refiners who signed 17 to 18 year contracts to ship over 600,000 barrels of oil per day to meet the needs of American consumers.

    Republican members of the House Energy and Commerce Committee issued a release on January 20, reaffirming their "commitment to getting the Keystone XL pipeline built despite President Obama's decision this week to reject the project. Members expressed their deep disappointment in the president's choice to say no to a project that would create tens of thousands of jobs and bring nearly a million barrels of secure oil to this country each day." Committee Chairman Fred Upton (R-MI) said, "We are absolutely committed -- as a Republican team -- to keep the Keystone XL pipeline on the front burner. The State Department has taken, as you know, over three years on this issue and we are ready for a green light and not a red light."

    The Committee will be holding a hearing this week with the State Department testifying. Members will discuss a bill introduced by Representative Lee Terry (R-NE) to take the pipeline decision out of the president's hands. H.R.3548, the North American Energy Access Act, would give the Federal Energy Regulatory Commission oversight of the pipeline's permit and instruct the agency to review and approve the pipeline application within 30 days, and to work in coordination with the State of Nebraska to review and approve the route and environmental review developed by the state. Rep. Terry said, "The American people want us to put aside politics and do what is right. It seems to me that it makes more sense that we let the experts on pipelines make decisions on whether this is a safe and sound pipeline, as opposed to a political entity worried about November elections."

    Ranking Member of the Committee Henry Waxman (D-CA) issued a brief statement saying, "Today, the Obama Administration rejected a dirty and dangerous tar sands oil pipeline, refusing to be bullied by the oil industry into approving the project in 60 days without even knowing where it would be built. Despite intense and misleading oil industry lobbying, Americans understand that what's good for the oil industry is not necessarily good for the American people. Keystone XL would boost tar sands development, which produces the dirtiest oil available, open up Asian markets to tar sands, and, if anything, increase gas prices. Keystone XL is a lose-lose proposition for energy security, gas prices, a safe climate, and a healthy environment."

    U.S. Chamber of Commerce President and CEO Thomas Donohue issued a statement indicating, "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. By placing politics over policy, the Obama administration is sacrificing tens of thousands of good-paying American jobs in the short term, and many more than that in the long term. Donohue said, "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. Issued yesterday, it recommends that the United States step up its game on energy and construct pipelines to deliver fuel as a key component of our economic recovery. Just as troubling, the President's decision will make us more dependent on oil from foreign nations that don't share our interests. He's also saying no to improving our relationship with our reliable and friendly ally to the north, Canada. American workers and consumers should be outraged. They deserve better than this politically-motivated decision."

    Frances Beinecke, president of the Natural Resources Defense Council (NRDC) issued a statement saying, "The pipeline was rejected for all the right reasons. President Obama put the health and safety of the American people and our air, lands and water -- our national interest -- above the interests of the oil industry. His decision represents a triumph of truth over Big Oil's bullying tactics and its disinformation campaign with wildly exaggerated jobs claims. Rather than bringing America energy security, the pipeline would have transported dirty Canadian tar sands oil through America's heartlands -- for export to other countries.

    "A decision on the pipeline proposal requires nothing less than a thorough and fair-minded analysis of its full effects on our environment and climate. But the schedule forced upon the Obama administration -- a 60-day rush to judgment -- left insufficient time to conduct that assessment. Pipeline proponents preordained this outcome. If TransCanada reapplies, Keystone XL will still face the same valid public concerns and fierce opposition as the first time. No matter how many times it is proposed, Keystone XL is not in the national interest.''

    On January 18, NRDC issued a new report along with Oil Change International, a Washington, DC-based group dedicated to exposing the true cost of fossil fuels. The groups and report indicate that, "Existing Canadian pipelines in the United States are operating only at half-capacity now, making any new pipeline unnecessary, much less a 1,700-mile XL pipeline through America's heartlands that would threaten U.S. lands and waters." The report, Keystone XL Pipeline: Undermining U.S. Energy Security and Sending Tar Sands Overseas, and authors indicate that, "This pipeline would divert up to 800,000 barrels of oil a day from the Midwest to Latin America, Europe and other countries -- at a huge profit for the oil companies." They said, "Keystone XL will ship tar sands to refineries on the Gulf Coast, where currently a quarter of the refinery output is exported. Keystone XL does nothing for U.S. energy security but plenty to boost exports and tax-free profits for Big Oil."

    Access the DOS announcement (click here). Access the statement from the President (click here). Access the Presidential Memorandum (click here). Access the full text of the DOS press conference on the decision (click here). Access the release from TransCanada (click here). Access the TransCanada Keystone XL project website for additional information (click here). Access the release from the House GOP Energy and Commerce Committee and press conference video (click here). Access the statement from Rep. Waxman (click here). Access the statement from the U.S. Chamber (click here). Access the 72-page Council on Jobs and Competitiveness Report (click here). Access the statement from NRDC (click here). Access a release and link to the report from NRDC, et al (click here). Access complete details and background from the DOS Keystone XL Pipeline Project website (click here). [#Energy/Pipeline, #Energy/KXL, #Energy/OilSands, #Energy/TarSands]

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