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Pipeline rejection angers Republicans, pleases environmental groups

This article first appeared in the St. Louis Beacon, Jan. 19, 2012 - WASHINGTON - The pressure of pipeline politics increased Wednesday after President Barack Obama -- complaining of a "rushed and arbitrary" deadline set by congressional Republicans -- rejected for now the proposed $7 billion Keystone XL pipeline project.

Citing a loss of "shovel-ready" jobs, GOP leaders condemned the predictable decision. Environmental groups, concerned about the project's safety and possible impact on climate change, praised the decision. And others expressed hope that a revamped route for the 1,700-mile Keystone XL -- which would carry "oil sands" crude from Canada to the Gulf Coast -- eventually will be approved.

"The president had a choice between jobs and politics, and he is choosing politics," said U.S. Rep. Fred Upton, R-Mich., chairman of the House Energy and Commerce Committee, contending that the pipeline "has been carefully vetted, environmentally scrutinized, and publicly discussed for more than three years."

But Sen. Barbara Boxer, D-Calif., chair of the Senate Environment and Public Works Committee, said Obama made "the right decision given the serious questions that remain unanswered about this proposal." She said that the GOP timetable "did not provide sufficient time to adequately review the Keystone pipeline project or to address a broad range of concerns related to human health and the environment. Any future proposals must be subject to a rigorous and independent review."

There is not likely to be much immediate local impact to Obama's decision, given that the Keystone XL project's main goal was to carry oil to the Gulf -- although it also would connect to the existing Keystone-1 pipeline that already crosses Missouri and leads to refineries or pipeline junctions in Wood River, Ill., and Potaka, Ill.

U.S. Rep. John Shimkus, R-Collinsville, a vocal backer of the Keystone XL who had traveled to the Canadian oil sands region in October to see the extraction process, argues that building the XL would sent more oil and added business to Illinois sites at the end of Keystone-1, including the Conoco-Phillips refinery in Wood River, the pipeline crossroads and oil terminal at Patoka, and a Marathon Petroleum Corp. refinery in Robinson. "All those places will benefit from the Keystone XL pipeline," he said, also arguing the the expanded Keystone would bolster U.S. energy security.

On Wednesday, Shimkus said "the delay is unacceptable" in the Keystone XL. He argued that pipelines are the safest way to transport crude oil; he warned that Canada is likely to sell its oil-sands crude to other countries if it is blocked from piping the oil through the United States; and he argued that the Canadian oil would bolster U.S. energy security. (Click here to see Shimkus comment.)

But a report issued Wednesday by the Natural Resources Defense Council and Oil Change International contended that the Keystone XL pipeline would make America less energy secure by bypassing the Midwestern oil markets for the Gulf, where much of the refined oil would be shipped to South American or Europe. But the Keystone builder, TransCanada, refutes such claims, saying that most of the oil would stay in this country.

Regional reaction to Obama's rejection of the Keystone XL was mainly from GOP critics. Contending that "the key to more American jobs is more American energy," U.S. Sen. Roy Blunt, R-Mo., said: "Once again, the Obama administration has blocked a real solution that would help create thousands of jobs without costing American taxpayers a dime."

Sen. Claire McCaskill, D-Mo., reaffirming her earlier comments that give conditional support to the Keystone XL, said in a statement Wednesday:

"I support the pipeline. It should be built, and it should be built in a thoughtful and responsible manner, not based on a political timetable."

McCaskill's "political timetable" description apparently referred to the fact that the State Department and Obama had been forced by a GOP provision of the payroll-tax-cut extension legislation to make a decision on the Keystone XL by early next month.

Several experts noted Wednesday that the Keystone XL project was likely to re-emerge later with a different route through Nebraska. The U.S. Department of State, which must issue the permit of any pipeline that crosses national borders into this country, said in a statement that "the department's denial of the permit application does not preclude any subsequent permit application or applications for similar projects."

In accepting State's decision, Obama also said his rejection was "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."

And TransCanada indicated that it planned to apply for a new permit to build the Keystone XL along a similar route. "While we are disappointed, TransCanada remains fully committed to the construction of Keystone XL," Russ K. Girling, the company's chief executive, told the New York Times. "Plans are already underway on a number of fronts to largely maintain the construction schedule of the project. We will reapply 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."

Other Missouri Republicans who criticized Obama's Keystone decision included U.S. Rep. Blaine Luetkemeyer, R-St. Elizabeth, who said, "This critical project has been delayed by heavy-handed EPA regulations and political stalling by the administration, and this latest move is motivated by a president who doesn't want to anger politically connected environmentalists that care little about creating jobs or lowering gas prices."

U.S. Rep. Sam Graves, R-Tarkio, chairman of the House Small Business Committee, said:

"With an unemployment rate above 8 percent and an underemployment rate of 15 percent, I am completely bewildered at why this administration has decided to reject a true shovel-ready project that will create 20,000 direct jobs and about 118,000 spin-off jobs, many of them through small businesses."

Rob Koenig is an award-winning journalist and author. He worked at the STL Beacon until 2013.