A VOW to VETO
Obama promises to reject Keystone pipeline bill if Congress passes it
Rising hopes that a new Republican-controlled Congress could finally force the approval of Canada’s Keystone XL pipeline were dashed Tuesday as U.S. President Barack Obama vowed to veto a bill approving construction of the contentious oil pipeline. As Republicans officially took control of both chambers of the U.S. Congress on Tuesday, they quickly began laying the groundwork for approval of Keystone with hearings beginning Wednesday.
But Obama immediately announced through his press secretary Josh Earnest that he will veto the bill should it pass both houses.
“The president wouldn’t sign it,” Earnest flatly stated Tuesday at his daily news conference.
He said Obama believes that circumventing the State Department assessment of the Keystone project, which is in its sixth year, would be the wrong thing for Congress to do.
Canada and Keystone project owner Trans-Canada Corp. have for six years lobbied Washington for approval of the $8-billion US pipeline only to watch helplessly as Obama disparages it as irrelevant to U.S. energy needs and a climate change threat.
For Canada, the pipeline, which will transport oilsands bitumen to Gulf Coast refineries, will give Canadian oil a much-needed outlet to world markets, allowing the industry to fetch higher international prices. At the moment, the U.S. is the only export customer.
Trans-Canada president Russ Girling criticized the U.S. review process for Keystone, claiming it has been highly unusual. “For decades the normal process to review and make a decision on an infrastructure project like Keystone takes two years,” he said in a statement. “We are well over the six-year mark reviewing the final phase of Keystone with seemingly no end in sight.”
“We believe the project should be approved,” said Natural Resources Minister Greg Rickford. “It will create jobs for American and Canadian workers, it has the support of the Canadian and American people, and the State Department itself has indicated it can be developed in an environmentally sustainable manner.”
Republican Sen. John Thune of South Dakota, which is one of the states traversed by the proposed pipeline, called the White House announcement a “disappointment.”
“The president fails his first big test when it comes to whether or not he wants to work with Congress,” he told CNN. “All the analysis (of Keystone) that can be done has been done and I think he is listening to his left-wing base. A lot of folks in the extreme environmental community I think have his ear on this issue and it’s unfortunate because it’s going to stay in the way of getting something I think the majority of Americans want.”
Environmental campaigner Mike Hudema of Greenpeace Canada congratulated Obama’s veto promise and added that the approval of Keystone “would lock Canada and the U.S. into a high-cost, highly polluting energy source for decades to come.”
Congress will begin debating the issue Wednesday and Republicans claim to have enough votes in both houses to approve the pipeline, but not enough votes to override a presidential veto.
The U.S. has about 245,000 kilometres of oil pipelines, but none have received the attention awarded to Keystone XL. This is because its carbonheavy bitumen has made it the target of U.S. environmentalists who have won the support of Obama.
Obama has stated that the effect of the pipeline on oilsands expansion, and therefore on climate change, will be a major factor in guiding his decision. The president has delayed his decision pending the final resolution of a Nebraska court case on the pipeline’s route. A court ruling is expected this month.
Obama has also minimized the project’s job-creation potential and suggested that recent increases in U.S. oil production negate the secure supply argument, rendering the Keystone and its Canadian oil irrelevant to U.S. energy needs.
Yet the precipitous decline in oil prices, which this week dipped below $50 a barrel from well over $100 only six months ago, has added a fresh dimension to the energy security argument.
Most new U.S. oil production comes from hydraulic fracturing, where oil drillers use a high-pressure water-chemical-sand mixture to crack open underground shale formations to release the oil and/or gas trapped within.
These wells require repeated fracking to keep the oil or gas flowing. Because the fracking is confined to a relatively small area of the oil and gas field, drilling into a shale formation is intense. All of this means high costs. Experts claim most operators in the Bakken oilfields, located in southern Saskatchewan, northern Montana and North Dakota, need $80-to-$100-abarrel oil prices to make a profit.