Obama will reject Keystone oil pipeline, administration official says

By Matthew Daly Associated Press

WASHINGTON — A senior Obama administration official says the White House will reject a Canadian company’s plan to build an oil pipeline from Canada to Texas.

The official, who spoke on condition of anonymity because the decision has not been announced, says a February deadline set by Congress doesn’t allow for a proper review of the $7 billion project.

The Feb. 21 deadline was set by a GOP-written provision as part of a tax bill that Obama signed into law just before Christmas. Obama had until that date to decide whether the pipeline was in the national interest.

The 1,700-mile pipeline would carry oil from tar sands in western Canada to refineries in Texas. It would pass through Montana, South Dakota, Nebraska, Kansas and Oklahoma.

Administration officials say that looming deadline has cut short the time needed to conduct required environmental reviews after the State Department ordered the project developer, TransCanada, to find an alternate route that avoids environmentally sensitive areas of Nebraska.

TransCanada says the project could create as many as 20,000 jobs over two years; opponents say that figure is inflated. A State Department report last summer said the pipeline would create up to 6,000 jobs during construction.

The GOP has pounded Obama over the issue, saying it’s a question of whether he wants to create jobs and import energy from an ally, or lose jobs and see Canadian oil go to Asia instead.

The $7 billion pipeline would run through six states and carry oil from Canada to Texas Gulf Coast refineries.

The pipeline proposal has forced the White House to make a politically risky choice between two important Democratic constituencies. Many unions back the project because of the prospects of new jobs in a down economy. Environmental groups fear the pipeline could lead to an oil spill disaster.

Some liberal donors threatened to cut off funds to Obama’s re-election campaign to protest the project, which opponents say would transport “dirty oil” that requires huge amounts of energy to extract.