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Could Keystone Pipeline Plan Be Revived After Obama’s Rejection?

January 18, 2012 at 12:00 AM EST
President Obama denied TransCanada Corp.'s application to build the Keystone XL pipeline Wednesday, a project that would have carried oil 1,700 miles from the tar sands of Canada to refineries in Port Arthur, Texas. Hari Sreenivasan discusses the president's decision and the next steps with The Washington Post's Juliet Eilperin.
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JUDY WOODRUFF: President Obama today denied the application for a hotly debated oil pipeline project. The Keystone pipeline would have carried oil 1,700 miles from the tar sands of Canada to refineries in Port Arthur, Texas.

Hari Sreenivasan has the story.

HARI SREENIVASAN: The president had postponed consideration of a permit last summer, citing environmental concerns. But Republicans demanded a decision, as part of December’s deal on extending the payroll tax cut.

In a statement today, Mr. Obama said he would not support the pipeline now because, in his words, “The rushed and arbitrary deadline insisted on by congressional Republicans prevented a full assessment of the pipeline’s impact.”

But House Speaker John Boehner criticized the decision, saying, “The president has said he will do anything that he can to create jobs. Today, that promise was broken.”

Juliet Eilperin has been covering this story for The Washington Post, and she joins me now.

Thanks for being with us.

JULIET EILPERIN, The Washington Post: Thank you.

HARI SREENIVASAN: What was the larger rationale for the administration to oppose this particular application for the pipeline?

JULIET EILPERIN: Their argument is that they had been looking at an alternative route through Nebraska which has an environmentally sensitive habitat in a place called the Sandhills region. And they had asked basically TransCanada to work with Nebraska’s Department of Environmental Quality and look for a new way to do this, and had predicted that this would delay a final decision on this pipeline permit until early 2013.

When the Republicans forced a decision by a deadline that was actually Feb. 21, the administration said, there’s no way we can do it. We’re not even going to go through the pretense of analyzing it, and we are rejecting this.

HARI SREENIVASAN: So the administration is not saying no to the pipeline, just the fact that they couldn’t possibly do this in 60 days?

JULIET EILPERIN: Exactly. And they have said that TransCanada, the firm that has proposed this project, could reapply, although this would start a new process if they did that.

HARI SREENIVASAN: Now, we heard a bit of John Boehner’s criticism. One Republican after another lined up today. Why’d they come out so strongly against this decision?

JULIET EILPERIN: Well, there are two things.

If you talk to them, they certainly would say they see this as a great way to drive economic growth in the United States, which wouldn’t be at taxpayer expense, and that this could create construction jobs, as well as other longer-term jobs. But it’s also become a key Republican talking point in this presidential campaign, as well as just in the broader congressional campaign. And so this is something that they think can really help them. And so they’re going to hammer away at this for months.

HARI SREENIVASAN: Is there any concrete idea of how many jobs are at stake? When you read the company’s press release, they say 13,000 direct and 7,000 indirect.

And then when you sort of look out at the blogosphere, it balloons up to 130,000 jobs. Why is there that big discrepancy?

JULIET EILPERIN: Well, it depends on who you ask.

My colleague Steve Mufson and I have done an analysis of this at The Washington Post. And what we found when you look closely at the numbers is that TransCanada is talking about 20,000 job years, but what that could mean is actually you have people working on it for one year and then people working on it another.

So when we talked to Russ Girling, the CEO of TransCanada, it became clear that we’re talking more in the range of 6,500 construction jobs for both the first and second year of the project. And they’ve already spent some money that would cut into the supply chain job. When you’re talking about those big numbers, that includes everything, kind of indirect jobs, including who’s going to be serving these construction workers’ dinners, to other things.

HARI SREENIVASAN: So help us put this in perspective if someone is just joining the story today. This has been a long process. What’s at stake here? What are we talking about getting, what oil from Canada to Port Arthur? How does that matter?

JULIET EILPERIN: We really are talking to some extent about the future of our energy supply and whether, for example, we want to import the kind of crude oil that’s produced in Canada, which is more greenhouse gas intensive, therefore contributes more to climate change and things like that, but clearly would be allowing us to get oil supply from a friendly neighbor, Canada.

And the refineries do need this oil at some point. They don’t need it now. They basically need it in a decade from now. And so one of the questions is, if this pipeline doesn’t go through immediately, will they find other ways to bring in this oil or will they export it elsewhere, and what will we do to promote our energy security?

HARI SREENIVASAN: And you have obviously got the oil and gas industry on one side with an unlikely partner in labor, and then you have got the environmentalists, as well as some landowners in Nebraska kind of together on another side. So how does the administration push this balancing act?

JULIET EILPERIN: Well, it has been a tough balancing act and a political headache for the administration.

They basically have concluded that they’re better off at this point siding with the critique of the environmentalists, some Nebraskans, as well as there are a few smaller unions that do back the idea of rejecting it, rather than pleasing, say, a handful of unions and the business community, who’s argued very strongly that they see this as an important project.

HARI SREENIVASAN: So the news today came out of the State Department because of course it crosses the border. What’s Canada’s reaction been to this?

JULIET EILPERIN: Canada said that they were disappointed. Both the president himself called President Harper in Canada, who indicated that he will try to see whether there are other customers for this oil and that he was disappointed.

The minister of natural resources basically issued the same statement, saying that also — but mentioning that they don’t think that this is dead, that they basically will continue to see if there’s a way to construct some sort of pipeline, even if it’s a different pipeline, to bring the oil from the oil sands down to the United States.

HARI SREENIVASAN: And how about the company at the center of all this, TransCanada? What are they planning?

JULIET EILPERIN: They also indicate that they’re going to keep pressing ahead for this and that they would like to have this pipeline up and operational by some point in 2014. Whether that’s doable remains to be seen.

HARI SREENIVASAN: And then what about the process here? If they reapply, which they’re welcome to do, what happens to the clock?

JULIET EILPERIN: The clock starts ticking from the beginning.

The State Department will be able to look at some of the environmental analyses that they’ve done already. But the senior State officials were very clear that this would be a new process and they wouldn’t say that they would expedite the process, which is really what TransCanada and the Canadian government has been asking for.

HARI SREENIVASAN: All right, Juliet Eilperin from The Washington Post, thanks so much for your time.

JULIET EILPERIN: Thank you.