Pelosi: GOP left Obama 'very little choice' on Keystone

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"This oil was always destined for overseas. It's just a question of whether it leaves Canada by way of Canada, or it leaves Canada by way of the United States," Pelosi said. "I don't agree to the stipulation that this is oil that's going to China now instead of the U.S. It was always going overseas."

The Keystone XL pipeline, proposed by TransCanada Corp to pump oil from the sands of Alberta to Gulf Coast refineries, has been a thorn in the side of Obama, pitting two of his most loyal constituencies — environmentalists and labor unions — against each other. In November, Obama angered Republicans and business groups when he announced his intention to delay a decision on Keystone until after this year's elections. That window, the White House argued, was needed to allow the State Department to conduct environmental impact studies. 

Republicans, however, rejected the timeline, and inserted language into December's payroll tax package requiring the administration to make its decision by Feb. 21.

On Wednesday, Obama did just that, arguing that the GOP's "rushed and arbitrary deadline … prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment." 

“As a result, the Secretary of State has recommended that the application be denied," Obama said in a statement. "And after reviewing the State Department’s report, I agree."

TransCanada, the State Department emphasized, can reapply for its pipeline extension in the future.

Republican leaders quickly lambasted the decision, saying it would prevent the creation of tens of thousands of jobs even as unemployment hovers above 8 percent. They accused Obama of hypocrisy for pushing his jobs bill while simultaneously killing the Keystone project. 

"The President says that ‘we can’t wait’ to act on jobs," House Small Business Committee Chairman Sam Graves (R-Mo.) said in a statement. "Well, … that’s not what his actions convey to the millions of unemployed Americans looking for work and small businesses that are struggling to stay open."

But a number of Democrats welcomed the move, arguing that the Republicans sealed the pipeline's fate when they expedited the approval timeline.

"The Republicans need only look in the mirror at why this decision … is a no," Pelosi said, "because there was just no way, in that timeframe, that the president could do anything else."