Keystone XL pipeline rejected; TransCanada set to re-apply for permit | TSLN.com

Keystone XL pipeline rejected; TransCanada set to re-apply for permit

Todd Neeley, DTN Staff Reporter

OMAHA (DTN) – The Obama administration Jan. 18 said it won’t allow the construction of the controversial Keystone XL pipeline that would have traversed the Midwest through what are considered to be environmentally sensitive areas of Nebraska.

TransCanada, the company planning to build the pipeline, immediately announced Wednesday the company will resubmit its permit application.

During public hearings held in Lincoln, NE, last fall many farmers and ranchers expressed concern that the pipeline could endanger the Ogallala Aquifer, one of the largest freshwater groundwater sources in the country that is the backbone of family farms and ranches.

The health of the aquifer has been held up as a vital component of agriculture production in the Midwest.

Opposition to the original pipeline route made for strange bedfellows, as environmental groups and some agriculture interest groups joined sides in opposing the project until the proposed route was moved away from the aquifer.

In a statement by the White House, President Barack Obama pointed the finger at Republicans who gave the president 60 days to review the project, as part of payroll tax-cut legislation signed into law in December.

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“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,” the president said in the statement.

“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.”

Immediately following the announcement, TransCanada Corp. President and CEO Russ Girling said in a statement that the company would re-apply for the permit.

“This outcome is one of the scenarios we anticipated,” Girling said. “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 would continue to work with the state of Nebraska in determining the safest route “that avoids the Sandhills,” and expects to complete the process in September or October.

The administration’s decision drew criticism from Republican lawmakers who blamed the president for engaging in election-year politics.

During a news conference Wednesday, Rep. Lee Terry (R-NE), said the president put “politics ahead of jobs” although construction of the pipeline has bipartisan support.

“This is the same state department that was telling us all summer that they had all the information they needed to make a decision,” he said. “In essence they already selected the route. Now, seven months later they’ve changed their minds. To me it’s obvious that this about election-year politics.”

In a written statement Sen. Charles Grassley (R-IA) called the president’s decision “stunning” and that it favors “extreme environmentalism over job creation and an energy partnership with a friendly neighbor.”

“The reality that President Obama has flat out rejected the priorities of grass-roots Americans for job creation and energy production that’s close to home means Congress needs to act,” Grassley said. “Whether or not the U.S. approves the Keystone pipeline project, the oil will be produced, and if it doesn’t come here, China likely will get it.”

U.S. Sen. Dick Lugar (R-IN) said in a statement that the White House has “misled” the American people on the proposed pipeline. In addition, Lugar said the administration already had about three years to make a decision.

“The Obama administration complains about a 60-day deadline, but in reality it has now had 1,217 days to make a decision,” he said. “How long does it take for President Obama to put the needs of America’s workers ahead of his political interests?”

Outgoing Sen. Ben Nelson (D-NE) said state of Nebraska officials should have been more involved with TransCanada from the outset.

“I believe the root cause of today’s decision is that the state of Nebraska didn’t work proactively with TransCanada years ago in determining a pipeline route through Nebraska that addresses safety and environmental concerns, as other states along the route did,” Nelson said in a written statement.

“After three years of inaction, the state of Nebraska just two months ago passed legislation to determine the route through Nebraska, recognizing that any deadline would be arbitrary. Since a new route hasn’t been announced, the process of state and public review hasn’t even begun. As a result, it would be premature to approve the project when Nebraskans don’t even know where the new route will be.”

Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-CA) said the administration’s decision to reject the “tar sands pipeline” was the right one given the questions about the proposal. She too said last month’s legislation did not provide enough time to review the project or the range of health and environmental concerns.

“Any future proposals must be subject to a rigorous and independent review that will ensure the health and safety of the American people,” Boxer said.

Daniel J. Weiss, senior fellow and director of climate strategy at the Center for American Progress, said in a statement that the denial of the Keystone permit is recognition that oil produced from tar sands would pollute the environment and would not create many U.S. jobs.

“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,” Weiss said, “not the foreign oil companies or their lobbyists who stand to profit.”

Frances Beinecke, president of the Natural Resources Defense Council, said the president’s action was taken 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,” Beinecke said in a statement. “His decision represents a triumph of truth over big oil’s bullying tactics and its disinformation campaign with wildly exaggerated jobs claims.”