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Obama disputes benefits of the Keystone XL pipeline

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Michael Bastasch Energy Editor

In an interview with The New York Times, President Barack Obama disputed claims about the economic benefits of the Keystone XL pipeline and said that more could be done to mitigate carbon dioxide emissions from Canadian tar sands oil production.

“Republicans have said that this would be a big jobs generator,” Obama told the Times in an article published Sunday. “There is no evidence that that’s true. The most realistic estimates are this might create maybe 2,000 jobs during the construction of the pipeline, which might take a year or two, and then after that we’re talking about somewhere between 50 and 100 jobs in an economy of 150 million working people.”

Obama added that 2,000 jobs were just “a blip relative to the need.”

In a nod to environmentalists, Obama also said that Canada could “potentially be doing more to mitigate carbon release” from tar sands production, but added that it was not clear that Canadian efforts would be enough to alleviate concerns over global warming.

Obama’s statements earned him a barrage of criticism from Keystone pipeline supporters.

“There’s no evidence that anything the president has done since 2009 has created jobs either, yet that has not dissuaded him from chasing phantom fuels and so-called green jobs at great expense to U.S. taxpayers,” said Benjamin Cole, spokesman for the American Energy Alliance. “The president said his stimulus would be a big jobs creator. It wasn’t. He claimed his Solyndra-style loan guarantees would be a job creator. They weren’t.”

Jobs claims for the Keystone pipeline have varied depending on the source. TransCanada, the company building the pipeline, said that it would create 20,000 jobs, including 8,500 in construction and 3,000 for pump station, and the State Department said it would create 42,100 direct and indirect jobs during the pipeline’s construction — however, the pipeline would only support 35 permanent and 15 temporary jobs after construction.

In 2010, TransCanada commissioned a study that said the pipeline would create 120,000 jobs, which included indirect jobs in other industries such as hotels, restaurants and transportation.

“Yet here we have a truly shovel-ready job creator with strong bipartisan support and the prospect of greater energy security for American consumers,” Cole added. “It’s increasingly clear that the White House has lost all touch with reality. The president has the temerity to suggest the Keystone pipeline would only create a few thousand jobs — a fact that he claims doesn’t warrant its permitting?”

The president’s estimate low-balls even his own State Department’s, signalling that the environment, not economics, will be the key factor in the pipeline’s approval.

Earlier this summer Obama gave a mixed message about the pipeline’s approval and said that the project should only be approved if it did not significantly contribute to carbon dioxide emissions.

“Our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution,” Obama said. “The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward.”

Some took this as a sign that the president would approve the pipeline.

Nebraska Republican Rep. Lee Terry said the president’s statements were “a positive step forward toward getting this project built, creating jobs and decreasing our dependence on foreign sources of oil.”

A spokesman for House Speaker John Boehner echoed this sentiment, saying “the standard the president set today should lead to speedy approval of the Keystone pipeline.”

Others argue that Obama’s remarks earlier this summer did not bode well for the pipeline.

“I do not expect them to approve the Keystone pipeline as long as he is president,” said Institute for Energy Research president Thomas Pyle. “There’s no reason [for Obama] to give on the pipeline when he holds all the cards on that as well.”

“Today’s announcement also makes me think it’s more likely the White House will reject the Keystone Pipeline, which is the biggest environmental battle in a generation — the president is a logical man, and taking two steps forward only to take two back would make no sense,” said 350.org founder and environmentalist Bill McKibben in response to Obama’s Keystone remarks in June.

The State Department’s review of the pipeline found that it would not significantly contribute to carbon emissions and would not harm the environment. However, the Environmental Protection Agency challenged the State Department review, calling it “insufficient” and arguing it needed to take a harder look at the environmental and climate impacts of importing Canadian tar sands oil.

IER’s Pyle added that the EPA’s challenge to the review could open up the process to lawsuits by environmental groups opposed to the pipeline.

Many Republicans blame the Obama administration for Keystone’s nearly five-year delay, but remarks made by Treasury Secretary Jack Lew point the finger at “political games” by Republicans.

“There were some political games that were played, that took it off the trail and path to completion, where Republicans put it out there as something that was put on a timetable that it could not be resolved. It caused a delay,” Lew said. “Playing political games with something like this was a mistake.”

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