By Roberta Rampton and Jeff Mason
WASHINGTON Jan 31 Pressure for President Barack
Obama to approve the Keystone XL pipeline increased on Friday
after a State Department report played down the impact it would
have on climate change, irking environmentalists and delighting
proponents of the project.
The agency made no recommendation in its report on whether
Obama should grant or deny an application by TransCanada Corp
to build the $5.4 billion line, which would transport
crude from Alberta's oil sands to U.S. refineries.
But the State Department said that blocking Keystone - or
any pipeline - would do little to slow the expansion of Canada's
vast oil sands, maintaining the central finding of a preliminary
study issued last year.
The 11-volume report's publication opened a new and
potentially final stage of an approval process that has dragged
for more than five years, taking on enormous symbolic political
significance and looming over Obama's environmental and economic
"President Obama is out of excuses," said John Boehner, the
Republican Speaker of the House of Representatives and a big
Keystone proponent. "If President Obama wants to make this a
'year of action' he will stand up to the extreme Left in his own
party, stand with the overwhelming majority of American people,
and approve this critical project."
With another three-month review process ahead and no firm
deadline for a decision on the 1,179-mile (1,898 km) line, the
issue threatens to drag into the 2014 congressional elections in
November. Obama is under pressure from several vulnerable
Democratic senators who favor the pipeline and face re-election
at a time when Democrats are scrambling to hang on to control of
the U.S. Senate.
The report offered some solace to climate activists who want
to stem the rise of oil sands output. It reaffirmed the idea
that Canada's heavy crude reserves require more energy to
produce and process - and therefore result in higher greenhouse
gas emissions - than conventional oil fields.
But after extensive economic modeling, it also found that
the line itself would not slow or accelerate the development of
billions of barrels of reserves that environmentalists say would
exacerbate global warming. That finding is largely in line with
what oil industry executives have long argued.
"This environmental impact study - which ignores the
evidence gathered in the past year that indicates the pipeline
will increase our level of emissions - is by no means the final
word on the Keystone XL pipeline," said Neera Tanden, president
of the Center for American Progress, a liberal-leaning group
with strong ties to the White House.
"I hope that President Obama will hold firm on the
commitment he made in his climate speech (last year) and reject
To read the report, click on
TransCanada Corp shares traded up more than 1 percent in
afternoon trading, reflecting optimism that the report was
positive for the eventual construction of the pipeline.
The company's Chief Executive Officer Russ Girling said the
case for the Keystone pipeline "is as strong as ever."
Canada's Natural Resources Minister Joe Oliver said he hoped
Obama would make a decision in the first half of this year.
"This has been a lengthy and thorough review process. The
benefits to the United States and Canada are clear. We await a
timely decision on this project," Oliver said. He described the
environmental review "as a positive step on the route to
For other reactions, click on
Secretary of State John Kerry will consult with eight
government agencies over the next three months about the broader
national security, economic and environmental impacts of the
project before deciding whether he thinks it should go ahead.
There is no deadline, and the report does not seek to address
some of the larger strategic questions involved.
"While we have a lot of deeper and broader analysis in this
supplemental (report), it does not answer the broader question
about how a decision on this potential pipeline fits in with
broader national and international efforts to address climate
change," a State Department official told reporters.
The pipeline has been in political limbo during the review,
a long-stalled process that complicated relations with allies in
Ottawa and annoyed advocates on both sides of the issue. The
line would carry as much as 830,000 barrels of crude per day
from Hardisty, Alberta, to Steele City, Nebraska, where it would
meet the project's already complete southern leg to take the
crude to the refining hub on the Texas Gulf coast.
Polls show a majority of Americans support the project,
although environmentalists have fiercely opposed it.
Republicans, supported by business leaders and the Canadian
government, want Obama to approve the project because of its
potential to create jobs and boost U.S. energy security.
For a Factbox on potential winners and losers, click on
The State Department's study found that oil from the
Canadian oil sands is about 17 percent more "greenhouse gas
intensive" than average oil used in the United States because of
the energy required to extract and process it, the State
Department official said. It is 2 to 10 percent more greenhouse
gas intensive than the heavy grades of oil it replaces.
But the study found oil sands development could be curbed in
a scenario where pipeline capacity was constrained, oil prices
were low, and rail shipping costs soared, the official said,
noting the uncertainty involved in modeling the impacts.
The study also examines data from a 2010 pipeline spill in
Michigan, where more than 20,000 barrels gushed into the
Kalamazoo River system. Pipeline operator Enbridge Energy
Partners was ordered last summer to do more to dredge up oil
from the bottom of the river.
Eight other government agencies ranging from the Pentagon to
the Energy Department to the Environmental Protection Agency
will have the opportunity to weigh in on the pipeline during the
next 90 days, and the public will have 30 days to comment,
beginning next week.
A previous comment period in March yielded more than 1.5
The White House will be kept informed about the process, but
does not have a formal role within the government's process for
reviewing pipelines, unless departments cannot agree on whether
the project should go ahead, the State official said.
Obama signaled in a major climate speech in June that he was
closely watching the review, and said that he believed the
pipeline should go ahead "only if this project does not
significantly exacerbate the problem of carbon pollution."