Archive for Tuesday, January 3, 2012

Obama, Congress begin 2012 in oil pipeline dispute

January 3, 2012


— President Barack Obama and Congress are starting the election year locked in a tussle over a proposed 1,700-mile oil pipeline from Canada to Texas that will force the White House to make a politically risky choice between two key Democratic constituencies.

Some unions say the Keystone XL pipeline would create thousands of jobs. Environmentalists fear it could lead to an oil spill disaster.

A law Obama signed just before Christmas that temporarily extended the payroll tax cut included a Republican-written provision compelling him to make a speedy decision on whether to build the pipeline. The administration is warning it would rather say no than rush a decision in an election year.

It's a dicey proposition for Obama, who enjoyed strong support from both organized labor and environmentalists in his winning 2008 campaign for the White House.

Environmental advocates, already disappointed with his failure to achieve climate change legislation and the administration's decision to delay new smog standards, have made it clear that approval of the pipeline would dampen their enthusiasm for Obama in the upcoming November election.

Some liberal donors even threatened to cut off funds to Obama's re-election campaign to protest the project, which opponents say would transport "dirty oil" that requires huge amounts of energy to extract.

If he rejects the pipeline, Obama risks losing support from organized labor, a key part of the Democratic base, for thwarting thousands of jobs.

Obama appeared to have skirted what some dubbed the "Keystone conundrum" in November when the State Department announced it was postponing a decision on the pipeline until after this year's election. Officials said they needed extra time to study routes that avoid an environmentally sensitive area of Nebraska that supplies water to eight states.

The affected area stretches just 65 miles through the Sandhills region of northern Nebraska, but the concerns were serious enough that the state's governor and senators opposed the project until the pipeline was moved.

Republican Gov. Dave Heineman, who opposed the initial route, says he supports efforts to accelerate the project, noting that provisions in the payroll tax bill allow the project developer to find a new route avoiding the Sandhills.

The new route would have to be approved by Nebraska environmental officials and the State Department, which has authority because the pipeline would cross an international border.

The pipeline would carry oil from tar sands in western Canada to refineries in Texas, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. The project's developer, Calgary-based TransCanada, says the pipeline could create as many as 20,000 jobs, a figure opponents say is inflated. A State Department report last summer said the pipeline would create up to 6,000 jobs during construction.

The payroll tax cut law gives the Obama administration 60 days to decide whether to allow construction of the pipeline.

An "arbitrary deadline" for the permit decision would compromise the process, short-circuiting time needed to conduct required environmental reviews and preventing the issuance of a permit, the State Department warned in a written statement on Dec. 12. Obama administration officials confirmed that view after the payroll tax bill was approved.

Republicans call the threat little more than an excuse that allows Obama to placate environmental groups while not rejecting the pipeline outright.

"The only thing arbitrary about this decision is the decision by the president to say, 'Well, let's wait until after the next election,' " said House Speaker John Boehner, R-Ohio.

Boehner and other Republicans say the pipeline would help Obama achieve his top priority — creating jobs — without costing a dime of taxpayer money. They hope to portray Obama's reluctance to approve the pipeline as a sign he favors environmentalists over jobs.

Russ Girling, TransCanada's president and chief executive, said his company would do whatever is necessary to make sure the project is approved.

"We've had more than enough surprises on this," said TransCanada spokesman Shawn Howard.

In Nebraska, where the pipeline faces strong resistance, state officials are awaiting an environmental study that will determine a new route. Officials have said the review will take six to nine months.

Some landowners in the Sandhills celebrated the decision to reroute the project, but the pipeline's strongest opponents say they still have concerns about the prospect of the government using its power of eminent domain to seize land, as well as liability issues in case of a spill.

"Republicans have bullied their way to get a reckless rider attached to a bill that was supposed to be about helping middle-class families," said Jane Kleeb, executive director of the group Bold Nebraska, which opposes the pipeline.

With the bill signed into law, Obama "must do the right thing for our land, water and families' health by denying the pipeline permit," Kleeb said.

Project supporters say U.S. rejection of the pipeline would not stop it from being built. Canadian Prime Minister Stephen Harper has said TransCanada could pursue an alternative route through Canada to the West Coast, where oil could be shipped to China and other Asian markets.

"Canada is going to develop this no matter what, and that oil is either going to come to the United States or it's going to go to a place like China. We want it here," said Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee.

Opponents call the West Coast option farfetched, noting that Canadian regulators have announced a one-year delay for a similar project that would carry tar sands oil to British Columbia, on Canada's western coast.

Native groups strongly oppose both the Keystone XL and the Northern Gateway pipeline proposed by TransCanada rival Enbridge. Canada's First Nations have constitutionally protected treaty rights and unsettled land claims that could allow them to block or significantly delay both pipelines.

Unions are watching closely. Unemployment in construction is far higher than other industries, with more than 1.1 million construction workers jobless, said Brent Bookers, director of construction at the Laborers' International Union of North America.

"For many members of the Laborers, this project is not just a pipeline, it is a lifeline," Bookers said, adding, "Too many hard-working Americans are out of work, and the Keystone XL pipeline will change that dire situation for thousands of them."

Roger Toussaint, international vice president of the Transport Workers Union, opposes the pipeline.

"The dangers of the pipeline are compelling, and no one should believe the claims of either the Republican leadership or the energy companies, with respect to the project being shovel ready or with respect to the number of jobs it's going to produce," he said.

Associated Press writer Grant Schulte in Lincoln, Neb., contributed to this report.


budman 6 years, 5 months ago

Cut out the politics and build the thing already. What a lousy move by Obama to delay the vote til next year.

deec 6 years, 5 months ago

Things we need to live: water, food, air. Things we don't need to live: oil. The part of the pipeline that has already been built has already had numerous spills. The process to extract the oil is enormously damaging to the environment. The initial EIS was done by a firm who has TransCanada as a major client, TransCanada has used bully tactics and the threat of eminent domain against landowners along the route, which wasn't even approved when they threatened to use eminent domain to seize land for their pipeline. If Canada wants to destroy the environment to create oil for export, let them build the refinery in their own country, There is no reason this oil has to travel to the Gulf Coast for processing, except it is already planned to be sold on the world market, not in the U.S.

verity 6 years, 5 months ago

A question, deec, or anybody who knows---how can TransCanada use eminent domain in the US? Seems I've heard the same thing and wondered how that worked.

deec 6 years, 5 months ago

The plural of bully is bullies. Oil is unnecessary for survival. Air, water and food are necessary for survival, Tar sands oil causes damage to air, water and soil, which are needed to grow food. The pipeline will cause damage to the water and soil when it leaks, as the built portion has already done numerous times.

tolawdjk 6 years, 5 months ago

Once again, a little knowledge can be dangerous.

This is from the US Energy Information Admininstration.

From this you can see that while, yes, we are exporting more refined product than we take in, we still import -much- more crude than we export. Further, for some unknown reason, we actually appear to export about 36 thousand barrels per day. Why? No good idea, but its obvious that someone feels that homegrown crude is worth more to them on foreign soil than it is on ours. Certainly feels like borrowing money from China.

I don't quite see how WIll makes the jump of logical conclusion that the US is a net exporter of refined petroleum product to a "specter of abundance", but I trust that the frothing right wing masses that have others think for them will explain it to me shortly.

However, the data does show that we could actually import less crude today and still have suffiecient refined products available for use in the US. We would just export less. The data, touted by Will, would seem to indicate that we don't -need- the XL pipeline for supplying crude to the US.

cowboy 6 years, 5 months ago

From Think Progess

One of the most important facts that is missing in the national debate surrounding the proposed Keystone XL tar sands pipeline is this — Keystone XL will not bring any more oil into the United State for decades to come. Canada doesn’t have nearly enough oil to fill existing pipelines going to the United States. However, existing Canadian oil pipelines all go to the Midwest, where the only buyer for their crude is the United States. Keystone XL would divert Canadian oil from refineries in the Midwest to the Gulf Coast where it can be refined and exported. Many of these refineries are in free trade zones where oil may be exported to international buyers without paying U.S. taxes. And that is exactly what Valero, one of the largest potential buyers of Keystone XL’s oil, has told its investors it will do. The idea that Keystone XL will improve U.S. oil supply is a documented scam being played on the American people by Big Oil and its friends in Washington DC. The fact that Canada has excess pipeline capacity is well known. In a Department of Energy report evaluating Keystone XL’s impacts on U.S. energy supply over the next twenty years, the agency found that it will take decades for Canada to produce enough oil to fill existing pipelines. On page 90, the report concludes that the United States will import the same amount of crude from Canada through 2030 whether or not Keystone XL is built.

beatrice 6 years, 5 months ago

Build a refinery closer to the source.

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