The Pipeline Rejection That Wasn’t


When I heard early on Wednesday that President Obama was going to reject the Keystone XL pipeline, I laughed. I laughed again when I saw the response of environmental groups to the announcement. Here is the president’s statement on the matter:

Today, the Department of State recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest. The President concurred with the Department’s recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest.

Since 2008, the Department has been conducting a transparent, thorough, and rigorous review of TransCanada’s permit application for the proposed Keystone XL Pipeline project. As a result of this process, particularly given the concentration of concerns regarding the proposed route through the Sand Hills area of Nebraska, on November 10, 2011, the Department announced that it could not make a national interest determination regarding the permit application without additional information. Specifically, the Department called for an assessment of alternative pipeline routes that avoided the uniquely sensitive terrain of the Sand Hills in Nebraska. The Department estimated, based on prior projects of similar length and scope, that it could complete the necessary review to make a decision by the first quarter of 2013. In consultations with the State of Nebraska and TransCanada, they agreed with the estimated timeline.

On December 23, 2011, the Congress passed the Temporary Payroll Tax Cut Continuation Act of 2011 (“the Act”). The Act provides 60 days for the President to determine whether the Keystone XL pipeline is in the national interest – which is insufficient for such a determination.

The Department’s denial of the permit application does not preclude any subsequent permit application or applications for similar projects.

Many of the environmental groups that opposed the project immediately began heaping praise on the president for this decision. The National Wildlife Federation said:

“Most politicians today buckle to the kind of threats made recently by oil lobbyists, but President Obama is doing the right thing by standing up for the families who are fighting to protect their clean water from the Keystone export pipeline.

“Big Oil wants to ram this pipeline down the throats of American families in their insatiable appetite for more profits. Keystone XL is a scam. Canada would get the jobs, China would get the oil, and America would get spills of toxic tar sands oil. The National Wildlife Federation’s 4 million supporters from across the political spectrum believe that clean water, wildlife and the rights of American families should come before the power of big oil companies.”

Friends of the Earth said:

“President Obama has shown bold leadership in standing up to Big Oil and rejecting the Keystone XL pipeline,” said Erich Pica, president of Friends of the Earth. “The climate movement took on Goliath and won, demonstrating its growing strength. Sustained grassroots pressure aimed at holding the president accountable to the public interest proved more powerful than all the lobbyists and campaign cash the oil industry could muster.” …

“Today’s announcement is a welcome example of President Obama following through on his promise that corporate polluter lobbyists will no longer set the agenda in Washington,” said Pica. “The Keystone XL pipeline would have been dirty at both ends, dangerous in between, and certainly not in our national interest. Big Oil and its bought-and-paid-for confederates in Congress couldn’t drown this dirty reality despite all of their threats and bullying.”

“This defeat for Big Oil is a huge victory for the health and safety of Americans. It belongs to the indigenous communities who first sounded the alarm on the dangers of tar sands extraction, to the Nebraskan farmers and Texan ranchers who withstood TransCanada’s bullying in the name of their land and livelihoods, to the activists from across the country who were arrested on the president’s doorstep, and to all of us fighting for a safe climate and justice-fueled future,” said Pica.

They are living in a fantasy world. Notice the last sentence of the president’s statement, which I put in bold for emphasis. This is not a rejection of the pipeline, it is at most a delay. It’s a way for him to play both sides, as he so often does, until after the November election. TransCanada will now submit an amended permit, perhaps rerouting around parts of Nebraska, the State Department will take the next year to think about it, and then it will be approved.

In the real world, that is the best that could ever reasonably be hoped for. There is far too much money at stake and far too many powerful interests here for that project to get denied by a president from either party. The best that could be hoped for is that the permit is approved with conditions that require stronger safety measures to prevent leaks and perhaps rerouting it around some particularly sensitive areas. Make no mistake about it, the Keystone XL pipeline will be approved and built after the election, whether Obama is in the White House or not.

Comments

  1. says

    The major objection I’ve heard to the pipeline precisely concerns the land through which it runs. If that gets fixed, why shouldn’t it be built?

  2. Jordan Genso says

    The best that could be hoped for is that the permit is approved with conditions that require stronger safety measures to prevent leaks and perhaps rerouting it around some particularly sensitive areas.

    The best I hope for is that this leads to this issue being part of the public debate (which is already coming true, as I’ve seen a few ads on TV recently from those in favor of the pipeline), and those opposing the pipeline sufficiently winning the debate to make it politically viable for the President to deny any further applications.

    Admittedly, my hope is highly unlikely to occur. But it’s the “best” I could come up with.

  3. Reginald Selkirk says

    If that gets fixed, why shouldn’t it be built?

    It probably will get built – after the election.

  4. Ichthyic says

    The major objection I’ve heard to the pipeline precisely concerns the land through which it runs.

    That’s just it though, it’s what you’ve “heard”.

    Do you really think it’s just the one small area in Nebraska that is “sensitive” to having oil from a pipeline spilled on it?

    no, what’s going on is that the only LEGAL way to fight the pipeline at all is by utilizing the sensitive area statutes, much like utilizing the endangered species act in cases where you’d really prefer to be in conflict with a project based on its overall impact to the biodiversity of an entire ecosystem.

  5. Ichthyic says

    Jordan is right.

    the best one could hope for with these things is that they become a matter of largescal public debate, and that the side opposing them becomes a strong enough voice to where approving the project becomes politically inexpedient.

    Jordan is also correct that, at least based on my experiences, the chances of this are next to nill.

  6. says

    This is not a rejection of the pipeline, it is at most a delay. It’s a way for him to play both sides, as he so often does, until after the November election.

    It’s worse than that. It’s ineffective. The Right, as usual, is losing its collective shit over him “stopping it” (Example).

    rturpin “The major objection I’ve heard to the pipeline precisely concerns the land through which it runs. If that gets fixed, why shouldn’t it be built?”
    Because it’s from a terrible source that comes from somewhere else and goes to somewhere else.

  7. Michael Heath says

    Ed writes:

    They are living in a fantasy world. Notice the last sentence of the president’s statement, which I put in bold for emphasis. This is not a rejection of the pipeline, it is at most a delay. It’s a way for him to play both sides, as he so often does, until after the November election. TransCanada will now submit an amended permit, perhaps rerouting around parts of Nebraska, the State Department will take the next year to think about it, and then it will be approved.

    I’m not well-informed on the subject, but it’s my understanding that the state of Nebraska has been consistent in rejecting the proposed easement. So that argues this decision and the length of the delay to develop and analyze an alternate plan till after the Nov-12 presidential election may be a coincidence. It also argues the president is not merely playing both sides, in fact I’m not sure what other feasible alternative is even available to him at this point given Nebraska’s rejection of the current plan.

  8. says

    Do you really think it’s just the one small area in Nebraska that is “sensitive” to having oil from a pipeline spilled on it?

    Oil pipelines criss-cross this nation, much like the interstate highways. Including quite a few that run to Canada. Do you think the way to minimize the aggregate oil spilled from them is to never build any more? Because I have this strange notion that newer infrastructure tends to carry less risk than aged infrastructure. The way to minimize overall risk of a spill is to continually raise standards on new infrastructure, while retiring old infrastructure.

  9. Doubting Thomas says

    Yes, it is the source of the oil, the tar sands of Canada that is the problem. This is the nastiest most polluting source of oil there is. Just because it is in Canada doesn’t mean that won’t impact us.

    Further, adding this miniscule supply of oil to the global market won’t significantly effect the price of oil. While it may ultimately go to China as is threatened, that just means the Chinese won’t be buying as much from elsewhere. We will all be competing in the same market.

    Let the Canadians try to run the pipe to the west coast if they want. That just means any spills will fuck them up, not us (as much).

  10. says

    Michael Heath wrote:

    I’m not well-informed on the subject, but it’s my understanding that the state of Nebraska has been consistent in rejecting the proposed easement. So that argues this decision and the length of the delay to develop and analyze an alternate plan till after the Nov-12 presidential election may be a coincidence. It also argues the president is not merely playing both sides, in fact I’m not sure what other feasible alternative is even available to him at this point given Nebraska’s rejection of the current plan.

    TransCanada has already agreed to reroute things around the Nebraska Sandhills, as that state’s legislature demanded a couple months ago. That new routing plan is expected to be finished in the next week or so.

  11. Jordan Genso says

    @ rturpin

    I believe many of those who are opposed to the pipeline also feel that such projects divert our attention from where it needs to be focused in order to solve our energy problems for the long term. We need to move away from energy sources that polute and add to the changing of our climate towards more sustainable sources. This project is similar to the “drill, baby, drill” mentality.

  12. unbound says

    Not to totally discount you rturpin, but the first thing that came to mind when I read your comment – http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill

    The newer infrastructure can indeed be built safer, but is there any reason that it will actually be built safer? With regulations being evil in this age (and enforced regulations being the only truly effective method to enforce safety), we shouldn’t assume that anything that involves profits will be built with safety firmly in mind.

    Remember that profits not only come first, but profits need to be higher than they were the year (or quarter) prior. Safety is one those things that tend to get shortcut in the name of the true US deity (money).

  13. says

    rturpin wrote:

    The major objection I’ve heard to the pipeline precisely concerns the land through which it runs. If that gets fixed, why shouldn’t it be built?

    Then you haven’t heard the numerous other serious objections to the project. Like the fact that tar sands oil is far worse for the environment than conventional crude oil, from the extraction methods (very water and energy intensive) to the shipping through pipelines (tar sands oil is laden with heavy metals and reacts very differently when it hits water after a spill; we are still cleaning up in Michigan almost two years later and the EPA admitted that they had no idea how to clean up such oil) to the refining process (higher in greenhouse gas and other types of emissions). Then there’s the fact that TransCanada has admitted that this will actually raise gas prices in the midwest. And the fact that they are lying about how this will boost America’s gas supply; in fact, it will almost certainly end up going on the world market. That’s why they’re so insistent on piping the oil to the Gulf Coast instead of sending it to refineries in Wyoming or the midwest. And the fact that TransCanada’s promise of making a state of the art pipeline that won’t have the problems with spills that previous piplines are absurd; the first phase of this pipeline, Keystone I, has leaked over 30 times in its first year and a half of operation, when it should be its safest. And the fact that tar sands oil makes spills both more likely and more difficult to detect quickly because the thickness and lack of viscosity of the thinned-out sludge sets off thousands of false pressure alarms per day, making it almost impossible to determine a real pressure problem from a false one until someone on site actually sees the oil leaking.

  14. d cwilson says

    The Department’s denial of the permit application does not preclude any subsequent permit application or applications for similar projects.

    This is pretty boilerplate. It’s a denial of this particular permit application. But it doesn’t close the door to someone submitting a new application in the future. If the federal government works at all like the state agency I work for, they never say never. There’s always the possibility of appealing the decision or resubmitting the application if they address the issues that led to the denial. I wouldn’t proclaim this as either the death of Keystone XL or an underhanded ploy delay it until after the election. It’s just another step on the road. Opponents have reason to cheer, but not kick back and declare the issue over and done with.

    Politically, this was actually a smart move. The GOP wanted this so badly that they were willing to raise people’s taxes in order to force an early decision. Now they look like corporate goons they are while Obama has scored some needed points with the base.

  15. says

    Ed Brayton writes:

    Then you haven’t heard the numerous other serious objections to the project. Like the fact that tar sands oil is far worse for the environment than conventional crude oil, from the extraction methods (very water and energy intensive) to the shipping through pipelines (tar sands oil is laden with heavy metals and reacts very differently when it hits water after a spill..

    While I understand these concerns, I don’t much understand them as objections to this pipeline. Canada has made the decision to mine its tar sands. It’s shipping the produce abroad, as well as to the US through other pipelines. Whether this pipeline gets built will not change that. Stopping this pipeline is not an incremental step to slowing the exploitation of Canadian tar sands.

    I agree completely with the idea that we need to push for better regulation of pipelines, wells, and other pieces of infrastructure that pose a risk to the environment. But there I would ask the question whether saying “stop this pipeline, period,” is the most effective way to do that. It begs the response that “these people aren’t interested in better regulations, but just in stopping anything having to do with oil.” FWIW, I think the Obama administration did the right thing after the Macondo disaster, by stopping further deep water drilling in the gulf. And I hope it did right in the new regulations it put in place.

  16. slc1 says

    Maybe I’m missing something here but why doesn’t Canada build their own fucking refineries to process this oil?

  17. Ichthyic says

    Do you think the way to minimize the aggregate oil spilled from them is to never build any more?

    retiring old infrastructure is a good point.

    has nothing to do with what I was talking about, but it’s a good point.

  18. Ichthyic says

    Stopping this pipeline is not an incremental step to slowing the exploitation of Canadian tar sands.

    and your evidence of that is?

    seriously, everything in business boils down to profits.

    if it becomes unprofitable to ship this stuff in ways OTHER than via a pipeline, and the pipeline project gets scuttled…

    how on earth can you conclude that wouldn’t be a step to slowing the process?

  19. Michael Heath says

    unbound in reference to the BP disaster in the Gulf last year:

    Remember that profits not only come first, but profits need to be higher than they were the year (or quarter) prior. Safety is one those things that tend to get shortcut in the name of the true US deity (money).

    This is a bridge that goes too far; otherwise we’d have an epidemic of oil spills. The BP disaster is precisely because BP’s culture promotes incompetence. And if they think this is due to a profit motive than they’re even dumber than I think they are, where they appear very dumb to me. We don’t see the BP level of incompetence in other companies.

    The lesson learned here is that we need a stricter more dynamic regulatory structure which is more divorced from the industry it monitors. The other lesson is doing it right is always more cost-effective long-term than not; a lesson most big companies learned and began to adopt in the mid-1980s through the 1990s.

  20. says

    Ichthyic writes:

    If it becomes unprofitable to ship this stuff in ways OTHER than via a pipeline, and the pipeline project gets scuttled…

    But it is profitable to ship it other ways. Tankers are very efficient at what they do. And this isn’t the only pipeline. If I were certain that TransCanada’s pipeline were dead, as opposed to delayed, I’d buy some Enbridge stock. Might be a good idea, anyway.

    slc1 writes:

    Why doesn’t Canada build their own fucking refineries to process this oil?

    No doubt, they have some. But Texas has a lot. And it’s usually more economic to expand existing refinery capacity than to build new ones. Keep in mind that a refinery isn’t the end point, but just one stop along the way. The refined products also have to be shipped out. And those can be as hazardous as the crude.

    Again, it’s important to match arguments to the right issue. I think the Obama administration was right to resist the rush, to pay attention to the particular route, and to look at safety issues. But this is not a fight about whether Canada will keep digging the oil sands. They will.

    Just to give a disclaimer: I’m half a Corposito, and spend a lot of time near the refineries that will be processing that crude. And I’m long in both oil stocks and tanker stocks.

  21. Ichthyic says

    Just to give a disclaimer

    well, at least you have that bit of honesty going for you.

    But it is profitable to ship it other ways.

    *sigh*

    you deflected the point, but didn’t respond to it.

    nice job.

  22. tassilo says

    I’m wondering why Obama declined to permit the project in the first place. If the State Dept. had granted it, there would have been all sorts of legal challenges, surely delaying the project for years. Also, it’s already been decided that the pipeline will bypass the Sandhills of Nebraska by some different, but undetermined route. That would require at least a supplemental EIS with all of the required analyses and reviews. At the end Obama or his successor would have to approve or deny a new permit, also subject to legal challenges. This is a process that will continue for some time, regardless, and certainly beyond this coming election.

    So why did he withold his permission? It looks like it might cost him politically.

  23. says

    tassilo:

    So why did he withold his permission? It looks like it might cost him politically.

    I would be surprised — and disappointed! — if Obama made this decision. If government is working well, this is the kind of thing where executives set priorities, then appoint the appropriate administrators to define procedures and see that they are executed. Obama should no more be deciding the permitting for this pipeline, than he should be making decisions on individual wells in the gulf.

    And we should all be offended by the GOP attempt to make this pipeline a matter of policy, rather than a matter of regulatory procedure.

  24. nemothederv says

    Instead of building a pipeline across several states ,involving two countries, why not build refineries next to the where the oil is? Is this an bad idea?

    Do people want to avoid living in North Dakota this badly or is there some enviromental issue I’m missing?

  25. nemothederv says

    Should have said Montana and not North Dakota but I don’t think that alters my question very much.

  26. dochopper says

    Funny about that Pipeline
    We are getting it here because the Canadians don’t want to build refinery’s or PIPELINES to move the oil and screw up their pristine environment with the Damage the construction will causes as well as the spills that might happen to them. And due to Canada’s strong laws they do not allow Tankers on their west coast .
    The Refinery’s in in Texas are in free trade zones so technically the oil can be shipped out like it never was there

    Welcome to third world America .

  27. Stevarious says

    @dochopper

    They are just taking the lesson from us – why risk danger to your own country when you can export the dirty work?

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