Obama Administration Vetoes Canada-Texas Pipeline

The U.S. government said Wednesday it has decided not to give permission for a proposed pipeline from Canada to the Gulf of Mexico, a project hailed by the domestic oil industry but denounced by environmental groups and landowners along the proposed route.

“The Department of State recommended to President (Barack) Obama that the presidential permit for the proposed Keystone XL Pipeline be denied and that, at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest,” the department said.

Obama, who had delegated the process of evaluating the project to Secretary of State Hillary Clinton, said in a separate statement that he agreed with her agency’s recommendation.


The department said it recommended denying the permit because a move by congressional Republicans to fast-track a decision on the pipeline had left it with “insufficient” time.

It added that its “denial of the permit application does not preclude any subsequent permit application or applications for similar projects.”

The Obama administration thus has left the door open for Calgary-based TransCanada Corp. to reapply for a permit at a later date after coming up with a more environmentally acceptable route.

The proposed 2,735-kilometer (1,700-mile) pipeline would transport crude bitumen from the western Canadian province of Alberta to the Texas coast. Based on the original route, staunchly opposed by environmentalists, the duct would have run through the states o Montana, South Dakota, Nebraska and Kansas.

Due to those concerns, the State Department said in November it would evaluate alternative routes that would avoid the environmentally sensitive Sand Hills area of Nebraska and it estimated the review process would be completed and a decision made in the first quarter of 2013, or after the presidential election.

Sensing a political opening, congressional Republicans attached a clause requiring an accelerated decision on the pipeline – a project they claim will create 20,000 jobs – to a payroll tax cut extension bill passed in December.

Congress gave the president 60 days to either approve the pipeline or explain why it is not in the national interest, putting him in a politically awkward position since giving the green light would enrage a portion of his base while rejecting it could make him seem uncommitted to bringing down high unemployment and bolstering energy security.

Opponents of the Keystone XL have stressed the environmental damage they say the pipeline would cause in the Sand Hills area, especially due to an increase in greenhouse gas emissions and the destabilization of sensitive ecosystems.