New climate claims fuel Obama’s Keystone veto

Low oil prices mean Keystone XL may have a bigger effect on climate change than earlier thought, a U.S. federal agency concluded in an analysis critics said gives U.S. President Barack Obama the ammunition to reject the pipeline.

The Environmental Protection Agency (EPA) said low global oil prices mean that Canadian crude, which is relatively expensive to process, may not be developed without a low-cost route to markets such as the pipeline.

The EPA findings led environmental groups to predict Obama, who has vowed to block the project if it would worsen climate change, will reject Keystone.

“Keystone doesn’t meet the president’s climate test,” Michael Brune, executive director of the Sierra Club, an environmental organization, said Tuesday. “We expect the president to reject this pipeline altogether.”

The proposed TransCanada Corp. pipeline has pitted Obama’s allies in the environmental movement against the energy industry.

The Republican-led House next week is set to vote on a Senate bill to approve the $8-billion (U.S.) pipeline and circumvent the State Department review.

Obama said he will veto the measure and continue with his administration’s review.

The State Department has no deadline for deciding on the application, spokeswoman Jen Psaki said Tuesday.

The department’s review was halted last year to await the outcome of a legal fight over Keystone’s route in Nebraska, which was concluded last month.

TransCanada said the EPA overstepped its role and ignored steps taken by Canada to cut emissions tied to climate change.

“This goes far beyond the mandate of the EPA,” spokesman Shawn Howard said in an email. TransCanada, which rose as much as 3.5 per cent in Toronto trading to $59.45 (Canadian), disputed some of the EPA analysis.