Obama Rejects Keystone XL Pipeline, Ending Years of Debate

U.S. President Barack Obama, with Secretary of State John Kerry at his side, speaks about the Keystone XL oil pipeline, at the White House in Washington November 6, 2015. Obama rejected the Keystone XL oil pipeline from Canada to Nebraska, more than seven years after the controversial project was first proposed. Kevin Lamarque/Reuters

President Barack Obama on Friday announced his decision to reject the Keystone XL pipeline, after years of heated debate, protest, and a review by the State Department which dragged on for six and a half years. The announcement follows a last-ditch effort earlier this week by TransCanada, the Canadian pipeline company behind Keystone XL, to prevent Obama from killing the project.

"The State Department determined that the Keystone XL pipeline would not serve the interests of the U.S.," Obama told reporters on Friday. "I agree with that decision." The president went on to say that the pipeline project would not create as many jobs as promised, nor would it have a significant impact on consumer gas prices.

Obama also cited concerns on the overall climate impact of continuing to pursue fossil fuel energy projects.

"America's now a global leader in taking serious action to fight climate change," he said. "And frankly, approving this project would have undercut that global leadership." Obama added that in the time the project has been under consideration, clean energy has become more affordable and prevalent throughout the U.S.

"The old rules said we couldn't promote economic growth and protect our environment at the same time," he said. "But this is America, and we have come up with new ways and new technologies to break down the old rules."

During years of controversy sorrounding the pipeline, which would transport Canadian oil sands from Canada to the Texas coast, the project became a symbol for opponents of wrongheaded development in the face of impending climate change disaster. Oil sands mining, after all, requires almost as much energy to extract as it produces. Plus oil sands crude is thick and sticky, and more difficult to clean up than conventional crude. Environmentalists and indigenous groups contended that a spill in fragile ecosystems along the pipeline's long path from Canada to Texas would be devastating.

On November 2, TransCanada asked the State Department to put their permit application on hold. According to a letter the company sent to Secretary of State John Kerry, they wanted to hear the results of a decision by regulators in Nebraska about a possible change to the pipeline's route. But most believe the request was an effort to punt the final decision on Keystone XL to the next administration—after all, the Nebraska decision was not set to come down for another seven months. On November 4, the State Department rejected TransCanada's request, opening the door for Obama to reject the pipeline.

Obama has openly criticized the pipeline project for years. In 2013, he dismissed the common Republican claim that the pipeline could reduce unemployment in the U.S., calling the potential impact of Keystone XL a "blip" in terms of job creation. (A year later, a State Department's report concluded that the project would only create 35 permanent jobs.)

Over time, the president's criticism became more explicit. At a year-end press conference last December, he said that Keystone XL would not be the windfall for Americans its supporters claimed.

"Sometimes the way this gets sold is, you know, 'Let's get this oil, and it's going to come here,' and the implication is that that's going to lower gas prices here in the United States. It's not," he said. "It's very good for Canadian oil companies, and it's good for the Canadian oil industry, but it's not going to be a huge benefit to U.S. consumers, it's not even going to be a nominal benefit to U.S. consumers."

A few months later, Congress passed its first piece of legislation of 2015: A bill calling for immediate approval of Keystone XL. They did so despite the White House's warnings that the president would veto such a bill. As promised, Obama vetoed a Senate Bill 1 on the grounds that the State Department had not finished its review of the project.

According to unnamed sources "close to the project," TransCanada, has been planning its next move in case of rejection well before today's announcement, the National Observer reports. Options on the table apparently include using the North American Free Trade Agreement to extract damages from the U.S. government, as well as immediately re−filing an application for another Keystone XL permit right before the 2016 presidential election.