Obama Quietly Vetoes Keystone XL Just Weeks After Saudi Arabia Visit

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Michael Bastasch DCNF Managing Editor
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President Barack Obama lived up to his promise to veto a bipartisan bill approving the Keystone XL pipeline Tuesday after months of debate by lawmakers.

“I am returning herewith without my approval… the ‘Keystone XL Pipeline Approval Act,’” Obama wrote in his veto statement. “Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.”

Republicans chastised Obama for vetoing legislation to approve the 1,179-mile pipeline that would bring oil sands from Alberta, Canada to refineries near the U.S. Gulf Coast. The veto comes as no surprise, as Obama has for months he would veto any legislation approving the pipeline.

Republicans have hit Obama for shutting down a project that would make the U.S. less dependent on oil from OPEC, Russia and other unfriendly nations.

“Disappointing but not surprising for the president to give the thumbs down to American workers, consumers, and our Canadian friends,” said Michigan Republican Rep. Fred Upton. “Keystone XL is an economic win-win that would create tens of thousands of shovel-ready jobs and strengthen our energy partnership with our North American neighbor, helping insulate us against future turmoil in the Middle East and elsewhere that could cause price hikes.”

In late January, Obama visited Saudi Arabia’s new King Salman bin Abdulaziz Al Saud. The White House said the main reason for the visit was to pay respects to the recently deceased King Abdullah. The visit, however, came amid low crude oil prices.

“Obama’s veto is bad news for US workers and US energy security,” said Dan Kish, vice president for policy at the Institute for Energy Research. “It is good news for the new Saudi King, especially if this is what the president promised him when they recently met.”

“Today, President Obama said no to job creation, no to new energy infrastructure, no to affordable energy, and no to greater North American energy security,” said Alaska Republican Sen. Lisa Murkowski.

Pipeline company TransCanada has been trying to build Keystone XL for six years, first applying for a presidential permit in 2008. But what should have been a routine project approval ran into tough environmental opposition.

Environmentalists have been waging a war against the project, saying it would lead to more oil spills and exacerbate global warming. Opposition has also been bankrolled by San Francisco billionaire Tom Steyer, who has spent millions opposing the pipeline and backing anti-Keystone Democrats.

“We thank President Obama for using his third veto to strike the Keystone XL bill,” Erich Pica, president of Friends of the Earth, said in a statement. “The veto sends a strong message to Congress that the government should represent the interests of the American people instead of Big Oil.”

Most Democrats latched onto such environmental arguments, adding that oil from the Keystone pipeline would be transported through the country only to be exported abroad for refining. But most energy experts said this was a dubious statement as the Gulf Coast has the biggest refining capacity in the country.

A new study by the consulting firm IHS found that most of the oil transported through the pipeline would be refined and consumed within the U.S.

“There is a common misunderstanding that somehow most or all of the oil shipped to the U.S. Gulf Coast via the Keystone XL pipeline would be exported to other countries,” Aaron Brady, a senior director at IHS, said in a statement.

“The reality is that the U.S. Gulf Coast is the world’s largest single refining market for heavy crudes such as oil sands, making it unlikely these barrels would be exported offshore. And, the overwhelming majority of refined products produced in the Gulf are consumed in the United States, regardless of the crude source.”

Despite Obama’s veto, Keystone XL could still have a chance (though a microscopic one) at approval if the State Department determines the project is in the national interest. Obama could then give it a presidential permit.

But Obama has said the project’s approval hinges on its impact on global warming, which Democrats and environmentalists argue is very high.

The Obama administration has not set a deadline for when it would rule on the pipeline’s ultimate fate.

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