Obama Rejects Keystone XL Pipeline Project

People rally against the Keystone XL pipeline project in Washington earlier this year. Photo: EPA / Michael Reynolds

WASHINGTON — US President Barack Obama rejected the Keystone XL pipeline on Friday, saying the project would have damaged the US ability to lead on efforts to tackle climate change ahead of Paris climate talks.

"As long as I'm president of the United States, America's going hold ourselves to the same high standards to which we hold the rest of the world," Obama said after meeting with Secretary of State John Kerry on the issue.

Obama called newly installed Canadian Prime Minister Justin Trudeau to inform him of the decision. He said Trudeau expressed disappointment but promised the two countries would continue to cooperate closely on energy and climate-change issues.

"The Canada-US relationship is much bigger than any one project," Trudeau said.

The proposed Keystone XL pipeline was slated to carry oil from Canada's tar sands in Alberta to the Midwestern state of Nebraska, where an existing pipeline would carry the Canadian oil to refineries in Texas.

The project called for the construction of a 1,900-kilometre-long pipeline that would pump 830,000 barrels of oil a day.

Obama's rejection of the project – reviewed for seven years by his administration – angered opposition Republicans, who had long advocated the pipeline to reduce US reliance on oil imported from the Middle East.

They have accused the Obama administration of improperly stalling on the issue.

Speaker of the House Paul Ryan, the top Republican in Congress, where the conservative party holds majorities, called the move "sickening," claiming Obama was rejecting thousands of well-paying jobs, spurning the largest US trading partner and overriding the will of the American people and Congress.

Obama rejected their arguments in favour of the pipeline and its "overinflated role in our political discourse."

"It became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter," he said.

"And all of this obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others."

Apart from climate change, Obama cited a lack of significant economic benefits, minimal impact on US energy security and already falling US petrol prices as other reasons for the decision.

Because the pipeline would cross the US-Canada border and span six US states, the US State Department spearheaded the review and was responsible for providing a recommendation to Obama.

Kerry said the US must focus on renewable fuels and that rejecting the pipeline went beyond the numbers of "jobs that would be created, dirty fuel that would be transported here or carbon pollution that would ultimately be unleashed."

"The United States cannot ask other nations to make tough choices to address climate change if we are unwilling to make them ourselves. Denying the Keystone XL pipeline is one of those tough choices – but it is the right decision – for America and the world," he said.

The US Chamber of Commerce said the move broke Obama's promise to create jobs.

"In rejecting the Keystone XL pipeline, President Obama has put politics before the best interests of the country," Chamber president Thomas Donohue said.

A senior State Department official said Friday that the public provided 5 million comments to the reviewers.

Environmentalists feared the project would increase greenhouse gas emissions and risked local environmental damage through potential leaks in the pipeline itself.

Environmental group Greenpeace called the move a victory for environmentalists, farmers and communities along the proposed pipeline route.

"By rejecting Keystone XL and cancelling Arctic drilling leases, President Obama is starting to build a climate legacy that addresses the critical need to keep fossil fuels in the ground," Greenpeace US director Annie Leonard said.

The company behind the Keystone XL pipeline proposal said it will consider all its options, including filing a new application.

"TransCanada and its shippers remain absolutely committed to building this important energy infrastructure project," chief executive Russ Girling said.

"We will review our options to potentially file a new application for border-crossing authority … and will now analyze the stated rationale for the denial."

On Tuesday, the US had rejected a request from TransCanada to postpone review of the proposal. TransCanada's request to "pause" the project stemmed from a hope that a Republican will occupy the White House in 2017, improving the chances the pipeline would be approved.

In February, Obama vetoed a measure passed by the Republican-controlled Congress calling for the construction of the pipeline, which would pump 830,000 barrels of oil a day from Canada to the Texas Gulf Coast.

Story: DPA,  Anne K Walters and Peter Voskamp