The Obama administration on Wednesday (January 18) denied an application for the construction of a $7 billion pipeline extension that would carry tar sands oil from western Canada to the Gulf Coast of Texas.
The decision was cheered by environmentalists who have long condemned TransCanada's Keystone XL pipeline as a threat to natural resources and public health along its 1,660-mile path through Montana, South Dakota, Nebraska and Oklahoma. But the move was criticized by those who said the pipeline would add much-needed jobs across the states while boosting domestic energy supplies.
President Obama said he did not base the decision upon the merits of the project. Instead, the move was necessitated, he said, by the "arbitrary nature" of a 60-day deadline pushed by congressional Republicans last December to rule on the pipeline's fate. With the deadline looming, the administration said it had little time to review the impact of the project, whose route through Nebraska was not yet finalized.
In November, TransCanada agreed to reroute the project to avoid Nebraska's fragile Sandhills region and bypass an aquifer that holds most of the state's drinking water. That announcement came while Nebraska lawmakers worked on a last-ditch attempt to give the state siting authority over the pipeline.
Nebraska Governor Dave Heineman told the Wall Street Journal's Market Watch on Wednesday that he was disappointed in the president's decision. A day earlier, he said he hoped the administration would grant conditional approval of the project while plans for the Nebraska route were completed, according to the newspaper. In a statement, Virginia Governor Bob McDonnell, chair of the Republican Governors' Association, said the president's decision "will have a negative impact on our nation's economy, efforts to improve national energy security, and the job prospects of thousands of our fellow citizens."
Keystone XL is not yet dead, however. TransCanada said it will reapply for a permit, with hopes of operating the pipeline by 2014. The Obama administration said it will reconsider the application once the new route is drawn.