The nearly four-year battle over the Keystone XL oil pipeline’s approval is done, though the project could still find new life in a separate proposal.
In a statement Wednesday afternoon, President Barack Obama announced he was rejecting the project’s permit following the advice of the U.S. State Department. The decision leaves open the possibility of a similar project or another proposal altogether.
Accordingly, TransCanada, the pipeline’s developer, said it won’t give up and plans to reapply for a similar permit that could allow a quicker review process.
There was simply not enough time, Obama said, to evaluate the pipeline’s adjusted route after TransCanada agreed to move the project out of Nebraska’s ecologically sensitive and groundwater-rich Sand Hills region that spans much of the state.
Obama and the State Department had been under deadline from Congress, where Republicans had attached a Feb. 21 due date for the decision to the payroll tax cut passed in December. The administration wanted to extend the process to 2013 and had long said the rush likely would kill the project.
“As the State Department made clear last month,” the president said, “the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment.”
The proposed pipeline, which would have connected oil sands in Alberta, Canada, to refineries in the Gulf of Mexico, had been under federal review since 2008 because the plan crosses an international border.
Supporters said it would generate thousands of temporary jobs and provide a stable source of oil, while opponents said the potential for environmental damage, particularly in Nebraska’s Sandhills overlying the Ogallala Aquifer, was simply too high. The process of extracting oil sands also does more environmental damage than other oil mining techniques.
Both sides quickly seized on the announcement. The oil industry and Congressional Republicans, including those competing to be the Republican presidential candidate, blasted the decision as foolish, wrongheaded, and an attack on jobs that will push the oil to China instead, according to news reports. Former House Speaker Newt Gingrich called it “stunningly stupid.”
“I’m deeply disappointed in President Obama’s decision today,” said Nebraska Sen. Mike Johanns in a statement. “The president missed a real opportunity to put people back to work and bring a reliable oil supply to the U.S.”
Meanwhile, environmental and Nebraskan groups hailed the decision as a victory against big oil.
“I think it’s amazing,” said Jane Kleeb, executive director of the political group Bold Nebraska, in a phone interview. The group has rallied opposition to the pipeline in the state for several months. “Nebraskans can stand really proud today.”
Obama’s decision cuts through a political dilemma the Republican deadline forced him to face: Two groups of Democrat supporters, labor and environmentalists, are on opposing sides of the project, and a decision either way would make someone unhappy.
“I’m assuming they’re trying to have it both ways,” said John Hibbing, a professor of political science at U. Nebraska-Lincoln. By leaving open the possibility for another pipeline, he said, Obama might avoid pushing away labor in an election year. “That’s probably a wise move politically.”
The move might complicate the administration’s relationship with Canada, which is the largest oil supplier to the U.S. The Canadian government strongly supported the pipeline and has warned that its denial might persuade them to look to China as a customer for the tar sand oil the pipeline would have carried.
“I’m sure it gives Hillary Clinton and the State Department a lot of work to do,” Hibbing said. The country’s tie to Canada is strong, he added, but “it’s also the sort of thing that needs attention before it can be repaired.”
Nonetheless, TransCanada said in a statement that it would continue working the Nebraska’s government to find a new route through the state, a process that could wrap up in the fall.
“Plans are already underway on a number of fronts to largely maintain the construction schedule of the project,” the company’s CEO, Russ Girling, said in a statement. “TransCanada remains fully committed to the construction of Keystone XL.”