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Obama Administration Rejects Keystone XL Pipeline

Wed January 18, 2012 - National Edition
Construction Equipment Guide

The Obama administration has rejected TransCanada’s permit application to build a pipeline across Montana and other U.S. states.

"Today, the Department of State recommended to President 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 State Department said in a statement. "The President concurred with the Department’s recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest."

It is also being reported that the administration will allow TransCanada to reapply after it develops an alternate route through the Nebraska Sandhills.

Speaker John Boehner, a Republican from Ohio, criticized the president’s decision almost immediately after it was announced.

"The president is selling out American jobs for politics," said Boehner, at a news conference.

The U.S. Chamber of Commerce offered equally harsh criticism of the administration’s decision.

"This political decision offers hard evidence that creating jobs is not a high priority for this administration," U.S. Chamber of Commerce President Thomas Donohue said in a statement. "The President’s decision sends a strong message to the business community and to investors: keep your money on the sidelines, America is not open for business."

"It shows a President who once again has put politics ahead of sound policy," said Mitt Romney, former Massachusetts governor. "If Americans want to understand why unemployment in the United States has been stuck above 8 percent for the longest stretch since the Great Depression, decisions like this one are the place to begin."

In a statement, President Obama said the decision was a result of "the rushed and arbitrary deadline insisted on by Congressional Republicans," saying it "prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment."

He said the decision "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," adding that the administration plans to "look for new ways to partner with the oil and gas industry to increase our energy security."

The announcement comes on the heels of a stern warning issued recently the oil industry’s top lobbyist who said the president could face “huge political consequences” in an election year [if he did not approve the project.]

Jack Gerard, president of the American Petroleum Institute, said it would be a “huge mistake” for President Barack Obama to reject the 1,700-mi. (2,736 km), Canada-to-Texas pipeline. Obama faces a Feb. 21 deadline to decide whether the $7 billion pipeline is in the national interest.

“Clearly, the Keystone XL pipeline is in the national interest,” Gerard said at the trade association’s annual “State of American Energy” event. “A determination to decide anything less than that I believe will have huge political consequences.”

Gerard said the oil group has teamed up with at least 15 unions to support the pipeline, which would create thousands of jobs.

“We will stand shoulder to shoulder” with labor unions that have backed the pipeline, including the Teamsters and the AFL-CIO’s Building and Construction Trades Department, Gerard said.

While the pipeline has not been a focus of the GOP race for president, Gerard said the issue has the potential to become a major factor in the general election.

“It’s already an election issue” in the presidential race and is likely to be a focus of several U.S. Senate races, Gerard said, calling the pipeline the largest “shovel-ready” project in the country.

The pipeline, proposed by Calgary-based TransCanada, would carry oil derived from tar sands in western Canada to refineries in Texas, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma.

TransCanada said the pipeline could create as many as 20,000 jobs over two years, 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 Associated Press, CBS News and Wire reports contributed to this story.) CEG Staff

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