March 22, 2012 / 5:10 PM / 7 years ago

Facing heat over gas price rise, Obama vows to speed pipeline's southern leg

CUSHING, Oklahoma (Reuters) - Standing in front of a row of pipes, President Barack Obama pledged on Thursday to accelerate approval of the southern leg of the Keystone XL pipeline, seeking to deflect criticism that his rejection of the full project helped drive up gasoline prices.

U.S. President Barack Obama delivers remarks on energy independence at Stillwater Pipe Yard in Cushing, Oklahoma, March 22, 2012. Obama is traveling to Nevada, New Mexico, Oklahoma and Ohio for events on energy independence. REUTERS/Jason Reed

The campaign-style stop was immediately dismissed as a stunt by Republicans, saying that Obama doesn’t have the authority to really jump start the project. Analysts say it won’t likely be finished until 2014 at the earliest.

Rising fuel costs are threatening to derail Obama’s hopes of winning re-election in November, and Republicans have honed in on his decision to block TransCanada Corp’s Canada-to-Texas pipeline as a sign that his energy priorities were hurting America.

U.S. gasoline prices have jumped nearly 30 cents in the past month, pushing the national average to $3.87 a gallon, according to the Energy Information Administration.

Obama’s trip to Cushing, Oklahoma, the starting site of the southern leg of the controversial project, was designed to show his “all of the above” energy strategy included room for oil and gas development in addition to support for renewable fuels.

“Today I’m directing my administration to cut through the red tape, break through the bureaucratic hurdles, and make this project a priority,” Obama said, standing without a tie at a podium that was surrounded by rows of green- and copper-colored piping segments.

The White House relished the setting and clearly wanted the photo-op. Bad weather nearly forced Obama to deliver his remarks in an Oklahoma City hotel instead.

It is unclear whether Obama’s call would actually speed up the approval process. The Army Corps of Engineers, one of the agencies that is likely to be involved, said on Wednesday it could not estimate how long approval would take since it had not yet seen an application from the company.

“Even with President Obama speeding up the process, we only expect Keystone XL to be operational in 2014 at the earliest,” investment house Barclays said in a research note Thursday.

TransCanada, however, said it was waiting to hear from federal agencies, predominantly the Army Corps, to see if any more paperwork would be required to win the necessary approvals for construction.

Republicans dismissed Obama’s move as a publicity stunt that made little difference to the timeline of the southern project or the problem of U.S. energy security. “He’s taking credit for going forward on the only portion of the pipeline that he doesn’t need to approve,” said Senator John Hoeven of North Dakota at a press conference. “This is literally straddling both sides of the issue.”

Obama rejected the full Keystone XL pipeline earlier this year, blaming Republicans in Congress for forcing his hand with a mandatory deadline that did not give the State Department enough time to study its environmental and safety implications. Hoeven has led the charge in the Senate to pass legislation that would bypass the administration and approve the full pipeline.


“Despite numerous attempts by Republicans to compel the president to approve the Keystone permit, Americans are still left with a 1,179-mile (1,897-km) gap between the oil resources and this southern portion of the pipeline,” said Brendan Buck, a spokesman for Republican Speaker of the House of Representatives John Boehner, referring to the full Keystone XL project.

A new Gallup poll conducted earlier in March showed 57 percent of Americans thought the U.S. government should approve the building of the entire Keystone XL pipeline. Among Democrats, 44 percent supported the pipeline, with 38 percent opposed.

The southern portion of the pipeline would drain a glut of crude in Cushing, the storage hub for U.S. crude oil traded on the futures market, easing deliveries to refineries along the Gulf Coast.

Republican presidential candidates Mitt Romney, Rick Santorum, and Newt Gingrich have made criticism of the decision a key part of their respective platforms to win their party’s nomination and the right to take on Obama in the November 6 election.

Though Obama’s original decision to block the pipeline cheered environmentalists, who make up an important part of his political base, those same supporters expressed dismay at his statement on Thursday.

“President Obama has taken a dangerous wrong turn on energy,” said Larry Schweiger, president of the National Wildlife Federation.

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“Rushing pipelines and drill rigs for rich oil executives will only delay the investments we need in renewable energy and create long-lasting damage to our waters and lands.”

Obama concluded his two-day energy-themed trip at a university in Columbus, Ohio, touring a facility where students were designing high-tech, fuel efficient vehicles.

Ohio is an important battleground state in the presidential election, and Obama used the venue to accuse Republicans of not supporting higher automotive fuel efficiency standards.

Additional reporting by Timothy Gardner and Ayesha Rascoe in Washington; Editing by Russell Blinch and Cynthia Osterman

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