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Keystone XL pipeline denied by Obama

US President Obama denies the Keystone XL pipeline project.
Keystone XL pipeline denied by Obama

President Obama has rejected the application over a seven-year battle to build the Keystone XL pipeline that was to carry Canadian crude oil through the US, to the ports in the Gulf of Mexico, and out into the world market.

In a statement from Obama, he said the after extensive public outreach and consultation with other Cabinet agencies, the State Department has decided that the Keystone XL Pipeline would not serve the national interest of the United States, in which he ultimately agreed with the decision.

Reasons for the rejection by the State Department, Obama said, include:

“First:  The pipeline would not make a meaningful long-term contribution to our economy.  So if Congress is serious about wanting to create jobs, this was not the way to do it.  If they want to do it, what we should be doing is passing a bipartisan infrastructure plan that, in the short term, could create more than 30 times as many jobs per year as the pipeline would, and in the long run would benefit our economy and our workers for decades to come.”  

“Our businesses created 268,000 new jobs last month.  They’ve created 13.5 million new jobs over the past 68 straight months -- the longest streak on record.  The unemployment rate fell to 5%.  This Congress should pass a serious infrastructure plan, and keep those jobs coming.  That would make a difference. The pipeline would not have made a serious impact on those numbers and on the American people’s prospects for the future.”   

“Second:  The pipeline would not lower gas prices for American consumers.  In fact, gas prices have already been falling -- steadily.  The national average gas price is down about US$0.77 cents over a year ago.  It’s down a dollar over two years ago.  It’s down $1.27 over three years ago.  Today, in 41 states, drivers can find at least one gas station selling gas for less than two bucks a gallon.  So while our politics have been consumed by a debate over whether or not this pipeline would create jobs and lower gas prices, we’ve gone ahead and created jobs and lowered gas prices.”

“Third:  Shipping dirtier crude oil into our country would not increase America’s energy security.  What has increased America’s energy security is our strategy over the past several years to reduce our reliance on dirty fossil fuels from unstable parts of the world.  Three years ago, I set a goal to cut our oil imports in half by 2020.  Between producing more oil here at home, and using less oil throughout our economy, we met that goal last year -- five years early.  In fact, for the first time in two decades, the United States of America now produces more oil than we buy from other countries.” 

Several organizations are up in arms with President Obama’s decision, and have heavily expressed their disappointment.

National Ocean Industries Association (NOIA) president Randall Luthi said that the Administration continued a pattern of concerning energy decisions today (6 November), by rejecting the Keystone XL pipeline.

“America will continue to need more energy from diverse sources, and while these sources will include renewables such as offshore wind, oil and natural gas will be needed to meet the majority of our energy needs for decades forward.  Coming just weeks after the Administration cancelled two previously scheduled Arctic lease sales and denied Arctic lease extensions; today's decision is both ill-timed and illogical," Luthi said.

TransCanada’s president and CEO Russ Girling expressed his disappointment with President Obama’s decision, and said the decision deals a damaging blow to jobs, the economy, and the environment on both sides of the border.

“The US consumes over 7MMb/d more oil than it produces and will continue to do so for decades, even despite US oil production increases. It is disappointing the administration appears to have said yes to more oil imports from Iran and Venezuela over oil from Canada, the United States' strongest ally and trading partner, a country with rule of law and values consistent with the US,” Girling said.

American Petroleum Institute (API) president and CEO Jack Gerard also disagreed with Obama, calling the rejection “an assault against American workers.”

“It’s ironic that the administration would strike a deal to allow Iranian crude onto the global market while refusing to give our closest ally, Canada, access to US refineries. This decision will cost thousands of jobs and is an assault to American workers. It’s politics at its worst,” said Gerard. “Seven years of review have determined the project is safe and environmentally sound, yet the administration has turned its back on Canada with this decision, and on US energy security as well.”

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