President Rejects Keystone XL

6 Nov 2015

By Chris Clayton
DTN Ag Policy Editor
and
Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Art Tanderup came in from harvesting corn to see the announcement. President Barack Obama said Friday he was ending the permit process for the Keystone XL pipeline.

"I don't remember when I've ever been so danged happy," Tanderup said in a phone interview. "There wasn't enough room in the combine for me to jump around in when I first heard that. I was jumping up and down."

Tanderup farms 160 acres just north of Neligh, Nebraska, that would have been in the pathway of the Keystone pipeline. Tanderup refused to sign an easement with pipeline developer TransCanada and his farm became a rallying point for people opposed to the project. Willie Nelson and Neil Young held a concert and rally there a year ago. Tanderup planted tribal corn on the farm. He built a solar array and bought a Chevrolet Volt, an electric car. He went all-in against the pipeline and the bitumen tar sands oil that would pump through it.

"The odds have been stacked against us all the time facing their money and power and influence," Tanderup said. "That's the thing that's absolutely amazing."

The 1,700-mile pipeline would have carried about 830,000 barrels of oil per day from Alberta oil fields to Texas refineries. President Barack Obama announced Friday that Secretary of State John Kerry had concluded the Keystone XL pipeline would not serve the national interests of the country. Obama agreed with that decision. The president said he spoke with new Canadian Prime Minister Justin Trudeau on the topic.

"We both agreed that our close friendship on a whole range of issues, including energy and climate change, should provide the basis for even closer coordination between our countries going forward," the president said.

Russ Girling, TransCanada's president and chief executive officer, said the company will continue to find ways to build the pipeline, including filing a new application for a presidential permit for a cross border crude oil pipeline from Canada to the United States. Girling said the Obama administration essentially ignored the science presented on the merits of the project.

"Today, misplaced symbolism was chosen over merit and science," Girling said. "Rhetoric won out over reason."

The president sought to dial back the significance of the administration's rejection and the pipeline itself. He said Keystone "has occupied what I consider, frankly, an over-inflated role in our political discourse." The president said both parties used the pipeline as a "campaign cudgel" rather than a policy issue. The pipeline was neither an economic silver bullet nor a pathway to climate disaster, the president said.

The president then used the pipeline rejection as a call for Congress to complete its work on a long-term highway funding bill that would create "more than 30 times the jobs" that the pipeline would create and provide more benefits to the economy. The president pointed out the decline in gas prices is an indication that Keystone would not lower gas prices for the American consumer.

Obama noted that "shipping dirtier crude oil into our country would not increase America's energy security." The president also discussed the importance of investing more in renewable energy and transitioning from fossil fuels to cleaner energy. He sought to make the case that renewable energy can still lead to strong economic growth.

"The point is the old rules said we couldn't promote economic growth and protect our environment at the same time," Obama said. "The old rules said we couldn't transition to clean energy without squeezing businesses and consumers. But this is America, and we have come up with new ways and new technologies to break down the old rules, so that today, homegrown American energy is booming, energy prices are falling, and over the past decade, even as our economy has continued to grow, America has cut our total carbon pollution more than any other country on Earth."

The president's decision came after TransCanada had sought to put a hold on the permitting process. TransCanada had asked the Secretary of State's office to table the decision after TransCanada began facing more administrative battles with public service commissions in Nebraska and South Dakota.

Still, sides politically were drawn on Keystone several years ago and those stances held true on Friday. Democrats praised the White House for an environmental legacy while Republicans cited the lost economic opportunity while declaring the president's decision was politically motivated. Nebraska Gov. Pete Ricketts, a Republican, sent out a terse, two-sentence response to the president's decision. "Keystone XL would have brought good-paying jobs and much-needed tax revenue to Nebraska's counties," Ricketts said. "President Obama's politically-motivated decision to reject this project puts the jobs and this tax revenue at risk."

South Dakota Gov. Dennis Daugaard said he was disappointed in the president's decision and noted that Alberta, Canada, will continue producing oil that will be shipped or piped elsewhwere. "By halting the Keystone Pipeline, the president is eliminating the opportunity for America to be more reliant on a trusted North American friend and less reliant on oil producers from other places -- many of whom do not respect or share our values," Daugaard said.

Jane Kleeb, director of Bold Nebraska, spearheaded opposition to the pipeline in the state by rallying farmers such as Tanderup, ranchers and Native American tribes in Nebraska and South Dakota.

"We stood our ground and today President Obama stood with us, the pipeline fighters. Tonight, landowners can finally go to sleep knowing their family is safe and sound. Our unlikely alliance showed America that hard work and scientific facts can beat big oil's threat to our land and water."

Jack Gerard, president of the American Petroleum Institute, didn't agree. API called the president's decision an "assault to American workers" and politics at its worst.

"Unfortunately for the majority of Americans who have said they want the jobs and economic benefits Keystone XL represents, the White House has placed political calculations above sound science. Seven years of review have determined the project is safe and environmentally sound, yet the administration has turned its back on Canada with this decision and on U.S. energy security as well."

Sen. James Inhofe, R-Okla., chairman of the Senate Environment and Public Works Committee, issued a scorching rebuke of the president's decision, saying the president was sending good energy jobs to other countries. A critic of climate science, he also said it was disingenuous for the president to make the case on global warming concerns. Inhofe argued the president's decision could eventually hurt the environment. Inhofe said, "The president's decision will work against his environmental objectives as it gives continued support to the transport of Canadian oil sands by rail throughout our country and will likely result in the export of oil to China, a country that will use it with much fewer environmental controls. It goes to show that the president is more interested in appeasing his wealthy environmental donors than helping the private sector create jobs for working families."

David Domina, a Nebraska attorney who represents landowners in a case against the pipeline, said the legal case over the constitutionality of TransCanada's eminent domain rights will continue being argued in court.

Tanderup fears the project will be reignited in 2017 with a new presidential administration. One reason for that argument is that TransCanada already has a high percentage of land easements.

"That's to be seen," Tanderup said. "By that time, I really hope there's not going to be a lot of demand for tar sands. It's something that time may hopefully take care of the problem."

Or, the pipeline project will morph into a purely domestic pipeline running from the Gulf of Mexico to the Bakken oilfields in North Dakota or Montana, Tanderup said.

Chris Clayton can be reached at chris.clayton@dtn.com

Todd Neeley can be reached at todd.neeley@dtn.com

Follow them on Twitter @ChrisClaytonDTN and @ToddNeeleyDTN

(CZ/BAS)