White House gives blessing to partial Keystone XL pipeline construction

The White House backed TransCanada Corp.’s bid to build a major portion of the Keystone XL oil pipeline Monday, a move that could shield President Obama from growing GOP attacks over the project.

By supporting the southern portion of the pipeline, the White House was able to blunt Republican criticism of the administration's energy policies. But the move quickly re-opened a rift with the president’s environmental base, which condemned the project.

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TransCanada said Monday that it will begin construction on a section of the pipeline that runs from Cushing, Okla., to Texas. It would carry crude oil pumped from land in the Midwest and surrounding areas to refineries in Texas.

The pipeline can't be extended to carry oil sands crude from Canada until the company receives a cross-border permit from the State Department, a permit the president rejected in January.

The Oklahoma-to-Texas project “will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight year high,” White House press secretary Jay Carney said in a statement, echoing Obama’s previous endorsement of the pipeline segment.

“We look forward to working with TransCanada to ensure that it is built in a safe, responsible and timely manner, and we commit to take every step possible to expedite the necessary federal permits," he said.


TransCanada said the southern section of pipeline, which the company dubbed the Gulf Coast Project, will cost $2.3 billion and will be completed by late 2013. The project must still receive other regulatory approvals.

Republicans have pounced on Obama’s January decision to reject Keystone XL’s cross-border permit as part of the party's broader strategy to target the president’s energy policies going into the election.

The GOP argues that Obama passed up an opportunity to create thousands of jobs and boost the economy by rejecting the permit. But Obama put the blame on Republicans, insisting that the decision was not based on the merits of the project but instead on a 60-day, GOP-backed deadline included in a two-month extension of the payroll tax cut.

The White House’s high-profile endorsement Monday of the Oklahoma-to-Texas portion of the pipeline could be used as ammunition to undercut Republican attacks on Obama over Keystone. But the GOP is unlikely to let up because the cross-border permit has yet to be approved.

TransCanada said Monday it would reapply "in the near future" for a the cross-border permit, which would allow the Keystone XL pipeline to cross from Alberta, Canada, into the United States.

The company said it expects the government to deal with the new application quickly.

"The over three year environmental review for Keystone XL completed last summer was the most comprehensive process ever for a cross border pipeline," TransCanada President Russ Girling said in a statement. "Based on that work, we would expect our cross border permit should be processed expeditiously and a decision made once a new route in Nebraska is determined."

The White House also welcomed TransCanada’s decision to reapply for the cross-border Keystone permit.

“We will ensure any project receives the important assessment it deserves, and will base a decision to provide a permit on the completion of that review,” Carney said in the statement.

TransCanada said Monday that it would continue working with Nebraska officials to identify an alternative route for Keystone around the state's ecologically sensitive Sand Hill's region.

The Obama administration had delayed a final decision on the project until 2013 in order to identify and analyze the alternative route. But the 60-day deadline in the payroll tax cut package forced the administration to weigh in on the project sooner.

The White House’s decision to back the southern section of the Keystone XL pipeline puts Obama at odds with his environmental base.

Opponents of Keystone XL raise concerns about increased greenhouse-gas emissions from oil sands production and potential oil spills along the pipeline route, among other things. They also say that industry-backed jobs numbers are wildly inflated.

Sierra Club Executive Director Michael Brune blasted the TransCanada plan to build the pipeline segment.

“TransCanada is hell bent on bringing tar sands, the world’s dirtiest oil, through America to reach foreign markets,” Brune said in a statement. “They can’t wait for a fair, scientific environmental review they know their pipeline would fail. So we see dirty political tricks, dirty PR tricks, and, now, this dirty trick to build the pipeline piecemeal.”

Bill McKibben, a vocal opponent of the pipeline and founder of 350.org, underscored his opposition to the Oklahoma-to-Texas portion of the pipeline, while noting that it won’t yet carry Canadian oil sands.

“Even though this doesn't bring new oil in from the tar sands, we stand with our allies across the region who are fighting to keep giant multinational corporations from condemning their lands," he said in a statement.