POLITICS

Obama tells federal agencies to 'cut through red tape' to OK part of Keystone XL

03/22/2012 04:00 EDT | Updated 05/21/2012 05:12 EDT
WASHINGTON - U.S. President Barack Obama pushed Thursday for the speedy approval for the southern leg of TransCanada's Keystone XL pipeline as he insisted oil has an important place in his national energy plans.

"Today, I am directing my administration to cut through red tape, break through bureaucratic hurdles and make this project a priority," Obama said to applause as he stood in front of stacks of pipe to be used to build a portion of Keystone XL from Cushing, Okla., to Gulf Coast refineries.

The announcement came just a few weeks after Obama rejected the entire length of Keystone XL, a pipeline that would transport Alberta oilsands bitumen from the northern reaches of the province through six U.S. states to Texas.

The president said there wasn't enough time to review a new route around a crucial aquifer in Nebraska in order to meet a tight deadline imposed by congressional Republicans.

The southern leg of Keystone XL is already slated to begin construction as early as June. Calgary-based TransCanada has been waiting for a permit from just one remaining agency overseeing public works, the U.S. Army Corps of Engineers.

For that reason, Republicans were quick to mock Obama for the announcement.

"The only recent action the president has taken on energy involved lobbying senators personally and successfully to prevent construction of the Keystone pipeline," John Boehner, speaker of the U.S. House of Representatives, told reporters on Capitol Hill.

"Yet today he's out in Oklahoma trying to take credit for a part of the pipeline that doesn't even require his approval .... It's already gotten its approvals. And this idea that the president is going to expedite this will have no impact on the construction of this pipeline."

Obama insisted on Thursday he remains a staunch supporter of domestic oil production as he stood in tiny Cushing, the locale of a glut of oil from states like North Dakota and Montana that cannot be easily transported south.

"Producing more oil and gas here at home has been, and will continue to be, a critical part of our all-of-the-above strategy," Obama said. "Anybody who suggests that somehow we're suppressing domestic oil production isn't paying attention."

The president also pledged to carefully review any future TransCanada permit applications, saying Republican pressure tactics forced his hand in February when he rejected the entire expanse of Keystone XL.

"As long as I'm president, we're going to keep encouraging oil development and infrastructure in a way that protects the health and safety of the American people," he said.

TransCanada spokesman Shawn Howard called the announcement good news.

"It's an important step forward for the Gulf Coast project," Howard said. "There's a recognition that this is a critical piece of North American energy infrastructure."

He added the announcement suggests the Obama administration is favourable to the entire Keystone XL pipeline.

"Ultimately, there's a recognition that Gulf Coast refiners and refiners in the Midwest need increased supplies of both Canadian and American oil," he said.

"It's just a fact, and it's not going to change and by moving oil from Canada and from fields in the U.S. into those refineries, it helps displace foreign sources of crude that come from regions that are often hostile to U.S. interests."

Alberta Premier Alison Redford praised Obama's statements.

"It's not for us to interfere in that regulatory process, there's a political environment right now in the United States, but to see those comments really right now I think are heartening for us," she told reporters in Edmonton.

Environmentalist Bill McKibben, meantime — the climate change expert who led high-profile White House protests against Keystone XL last summer — expressed dismay.

"No movie producer, 50 years from now, will be able to resist a scene that explains the depth of our addiction to oil: the president coming to the state that just recorded the hottest summer in American history, in the very week that the nation has seen the weirdest heat wave in its history, and promising not to slow down climate change but instead to speed up the building of pipelines," he said in a statement.

"It's clear that the power of the oil industry drives political decision-making in America."

Environmentalists have mounted an extensive campaign against Keystone XL, assailing the plan to transport millions of barrels a week of bitumen — an energy source they decry as "dirty oil" — to the Gulf Coast.

The U.S. State Department has yet to make a decision on the entire length of the proposed, $7.6 billion pipeline. The department is assessing the project because it crosses an international border.

In November, the State Department punted a decision on the pipeline until after this year's presidential election, citing concerns about the risks posed to the aquifer.

Pipeline proponents responded angrily, accusing Obama of making a cynical political move aimed at pacifying environmentalists and improving his chances of re-election. They insist Keystone XL will create thousands of jobs and help end American dependence on oil from often hostile OPEC regimes.

Outraged Republicans then successfully inserted pipeline provisions into payroll tax cut legislation in late December.

But within a month, facing a mid-February deadline imposed by those measures, Obama nixed TransCanada's existing permit outright. But he also assured Prime Minister Stephen Harper that the rejection was not a reflection of the pipeline's merits, and that Republican pressure tactics necessitated his decision.

Obama's announcement on Thursday, near the end of a four-state tour to tout his energy policies, came as prices at gas pumps in the U.S. continue a relentless march towards $4 a gallon.

Republicans have been blaming Obama's energy policies for rising pump prices and have been hounding him for rejecting the pipeline.

In Oklahoma, Obama pushed back against suggestions that rising gas prices are easily halted.

"Anyone who says that just drilling more will bring gas prices down ... isn't paying attention; they're not playing it straight. We are drilling more. We are producing more. But the fact is, producing more oil at home isn't enough by itself to bring gas prices down overnight."