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 "The pipeline would not make a meaningful long-term contribution to
our economy," Obama told a press conference. He said it would not
reduce gasoline prices, and shipping "dirtier" crude from Canada
would not increase U.S. energy security.
The denial of TransCanada Corp's more than 800,000 barrels per day
project will make it more difficult for producers to develop the
province of Alberta's oil sands. It could also put the United States
in a stronger position at global climate talks that start in Paris
on Nov. 30 in which countries will aim to reach a deal to slow
global warming.
U.S. Secretary of State John Kerry, who determined the pipeline was
not in the country's interest before Obama's final decision, said
approving Keystone "would significantly undermine our ability to
continue leading the world in combating climate change."
Keystone XL would have linked existing pipeline networks in Canada
and the United States to bring crude from Alberta and North Dakota
to refineries in Illinois and, eventually, the Gulf of Mexico coast.
TransCanada first sought the required presidential permit for the
cross-border section in 2008 but the proposal provoked a wave of
environmental activism that turned Keystone XL into a rallying cry
to fight climate change. Blocking Keystone became a litmus test of
the green movement's ability to hinder fossil fuel extraction in
Canada's oil sands.
"This is a big win," said Bill McKibben, co-founder of the
environmental group 350.org which helped make Keystone a symbol of a
movement to slow global oil output. Obama's decision "is nothing
short of historic, and sets an important precedent that should send
shockwaves through the fossil fuel industry."
TransCanada and other oil companies said the pipeline would have
strengthened North American energy security, created thousands of
construction jobs and helped relieve a glut of oil.
But since 2008 the United States has experienced a domestic drilling
boom which has boosted oil production 80 percent and contributed to
a slump in U.S. oil prices from above $100 a barrel to about $44.
CANADA-U.S. RELATIONSHIP
Newly sworn in Canadian Prime Minister Justin Trudeau, a supporter
of Keystone, voiced disappointment but said the Canada-U.S.
relationship "is much bigger than any one project."
TransCanada Chief Executive Russ Girling said the company would
review its options to potentially file a new application for a
pipeline to bring oil sands crude to the United States.
"Today, misplaced symbolism was chosen over merit and science,
rhetoric won out over reason," he said in a statement.
[to top of second column] |
A senior U.S. State Department official left open the possibility
TransCanada could seek a different decision under another U.S.
administration, telling reporters: “for the State Department to
reconsider the application at any time, the company would have to
reapply.”
TransCanada had asked the Obama administration on Monday to pause
the review in a move seen by many as an attempt to postpone a
decision until a new U.S. president took over in 2017. TransCanada
shares fell 5.2 percent on the Toronto stock exchange on Friday to
C$42.90.
All the Democratic U.S. presidential candidates, including front
runner Hillary Clinton, oppose the pipeline while most Republican
candidates are in favor.
Friday's rejection was a loss for Republicans on Capitol Hill who in
January had made Keystone their top issue of the new Congress. They
passed a bill that would have allowed Congress to decide on the
pipeline, legislation Obama vetoed.
Senator John Hoeven, a Republican of oil-producing North Dakota,
said TransCanada would be able to challenge the decision under
international trade agreements such as NAFTA or the World Trade
Organization.
Obama's decision will have a “chilling effect” on any company
considering building energy infrastructure, which could leave the
United States at risk in the long term of not having the pipelines
it needs, Hoeven said in an interview.
(Reporting by Jeff Mason, Timothy Gardner, Arshad Mohammed, Patrick
Rucker, Roberta Rampton and Ayesha Rascoe in Washington and Nia
Williams in Calgary; Writing by Timothy Gardner; Editing by Lisa
Lambert and James Dalgleish)
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