Obama fast-tracks Keystone link
Pipeline would ease glut at vital hub
WASHINGTON – It was Transcanada’s pipe that formed the photo-opportunity backdrop and it was Transcanada’s storage yard. But it most definitely wasn’t Transcanada’s event.
President Barack Obama on Thursday swooped into oil-rich Oklahoma to trumpet his administration’s decision to fast track the southern leg of the Calgary-based company’s Keystone XL pipeline, calling it a “common sense” decision that will alleviate a growing oil bottleneck at the state’s Cushing hub.
His bigger message, however, was a political one – directed straight at Republicans who hope to wield Keystone XL as a club against Obama in the fall presidential election.
“This whole issue of the Keystone pipeline has generated, obviously, a lot of controversy and a lot of politics,” Obama told an invited audience, which included Transcanada executives.
“Anybody who suggests that somehow we’re suppressing domestic oil production isn’t paying attention. They are not paying attention.”
Obama came to Transcanada’s Stillwater Pipe Yard with the challenging task of explaining a pair of recent pipeline decisions that his critics describe as both contradictory and politically opportunistic.
After denying Transcanada a presidential permit in January to build the entire 2,700 kilometre Keystone XL pipeline between Alberta and refineries on the Gulf Coast of Texas, Obama is now instructing the U.S. government bureaucracy to “cut through the red tape, break through the bureaucratic hurdles” and approve the southern leg of the pipeline.
The U.S president said rapid growth of oil production in the U.S. – particularly in the Bakken fields of North Dakota – has created demand for the lower section of Transcanada’s line. A glut of oil is building in Cushing, he said, even as Texas refineries are in need of supply.
Transcanada announced plans in February to proceed with the southern Keystone XL leg – now called the Gulf Coast project – as a standalone pipeline that would not require a special presidential permit.
Company officials were on site for Obama’s speech in Cushing and have said work will begin on the southern pipeline leg by June.
But the northern portion – from Hardisty, Alta. to Steele City, Neb. – isn’t so urgent that it can’t wait for development of a new route to avoid the state’s ecologically fragile Sand Hills, Obama said.
Speaking in front of a stack of Transcanada’s U.s.-made pipeline, Obama said Republican lawmakers were responsible for forcing his rejection of the full pipeline because of legislation forcing a decision before a proper environmental assessment could be done.
“Congress decided they wanted their own timeline – not the company, not the experts,” Obama said.
Transcanada, which first applied for the Keystone XL permit in 2008, has repeatedly said its project has been the most thoroughly vetted pipeline in history. The company did not take sides last December when Congress passed legislation to force Obama’s hand on Keystone XL.
On Thursday, company executives on hand for
“Congress decided they wanted their own timeline.”
BARACK OBAMA
Obama’s speech were equally measured and diplomatic.
Robert Jones, Transcanada’s vice-president for pipelines, said in a telephone interview from Cushing he was pleased Obama recognized the importance of pipeline infrastructure and the need to quickly build Keystone XL’S southern leg.
“Transcanada hasn’t been actively involved in the political end of this. We have been responsible and respectful when asked,” said Jones.
“For Transcanada there is still a lot of work to do. For us, today is just one more milestone, one more step.”
Asked about Transcanada’s relationship with a White House that has both thrown up and removed obstacles to the pipeline, Jones said: “We have never been working directly with the White House. This is an event they requested. I would say our relationship over the past week has been very respectful.”
Obama’s speech followed a White House announcement on Wednesday that the president would issue a specific memorandum to U.S. government departments to “expedite” federal permitting of the southern leg from Cushing to Port Arthur, Texas.
Transcanada is currently working with the U.S. Army Corps of Engineers and the U.S. Fish and Wildlife Department on obtaining the required permits, Jones says. The company’s goal is complete construction by mid 2013.
The company is also in the process of completing plans for an alternative route for the northern section of the Keystone XL pipeline. It will still require a presidential permit because the pipeline will cross the Canada-u.s. border.
Obama’s decision on the original Keystone XL permit has emerged as a major issue in the presidential campaign. Republican candidates Mitt Romney and Newt Gingrich regularly accuse Obama of killing jobs and pushing gas prices higher by denying its construction.
Obama scoffed at the charge. Noting U.S. oil and gas production is at an eightyear high, he said there is no quick fix to rising gasoline prices.
“We use 20 per cent of the world’s oil. We only produce two per cent of the world’s oil,” he said.
“Even if we opened every inch of the country – if I put an oil rig on the South Lawn – if we had one right next to the Washington Monument, even if we drilled every little bit of this great country of ours, we’d still have to buy the rest of our needs from someplace else.”