The move is certain to escalate the political debate in Washington over the pipeline, which would carry oil sands from Alberta, Canada, to refineries on the Gulf Coast.
The GOP has pummeled Obama over Keystone for months, arguing he is standing in the way of energy development.
In rejecting the permit, Obama welcomed Keystone developer TransCanada to reapply. The president has said his administration will reevaluate the permit based on a full review of the project.
Obama threw his support behind the southern leg of the project — which would carry oil from Cushing, Okla., to Texas — earlier this year. But House Speaker John BoehnerJohn BoehnerBoehner compares Trump to Teddy Roosevelt Boehner: 'Thank God' I wasn't in the middle of election Ryan delays committee assignments until 2017 MORE (R-Ohio) and other Republicans have said that’s not enough.
Republicans, who have sought to force Obama’s hand on Keystone with a series of bills, are hoping to approve the project with language included in legislation extending federal transportation funding. But the provision faces an uphill battle, amid opposition from Senate Democrats.
Separately, the Interior Department is expected to unveil Friday proposed regulations aimed at increasing oversight of hydraulic fracturing, or fracking, on public lands.
The regulations are the latest effort by the Obama administration to exert more federal oversight over fracking, the drilling technique that has helped usher in the natural gas boom, but has also raised environmental concerns.
As E2 noted Wednesday, the regulations — combined with recent Environmental Protection Agency rules aimed at cutting air pollution that results from fracking — could be politically treacherous for Obama going into the election.
Republicans and business groups have mounted an aggressive lobbying campaign against the rules, arguing that states are better prepared to oversee fracking. The GOP will likely use the regulations to paint the Obama administration as an opponent of oil-and-gas development, a tactic Republicans hope will pay off amid concern about high gasoline prices.
Fracking involves high-pressure injections of water, chemicals and sand into rock formations to open up seams that enable trapped oil and natural gas to flow.
The rules, which only pertain to fracking on public land, are expected to require the disclosure of chemicals used in the drilling technique, along with regulations on well integrity and wastewater management.
While oil-and-gas companies have been critical of the rules, a top oil lobbyist said Wednesday that Interior has made some changes to the plan that are to the industry's liking.
Report: DOE meeting green power mandate, but could do better
The Energy Department is beating targets in a 2005 energy law to get at least 7.5 percent of its power from renewable sources, the agency’s inspector general says in a new report.
In fiscal 2010, three years before it had to, DOE met the target by obtaining over 9 percent of its power from renewables, according to the report.
But don’t look for DOE facilities to be generating much of this green power onsite, even though that’s what the Energy Policy Act of 2005 hoped for.
“Despite EPAct's preference for producing renewable energy on Federal lands, the Department relied almost exclusively on purchases of renewable energy. In fact, in FY 2010, on-site renewable energy generation represented less than 1 percent of total electricity consumed Department-wide,” the report states.
“For the most part, sites met EPAct requirements either through purchasing renewable energy credits (RECs) or paying a premium for ‘green power,’” it adds.
The report finds that DOE sites have not always purchased power in the most cost-effective way, among other criticisms.
Pickens: Kochs are ‘deterrent’ to U.S. energy plan
There isn’t much love lost between billionaire energy magnate T. Boone Pickens and the billionaire industrialist Koch brothers when it comes to energy.
They’ve tussled in the past over opposition from the Koch’s to Pickens’ proposal for billions of dollars in tax credits to greatly expand use of natural gas as a transportation fuel.
And now Pickens is broadening his criticism in remarks to Yahoo Finance. From that piece:
Pickens' biggest concern right now centers on what he sees as the Obama administration's lack of an energy policy. He says special interests are blocking real energy reform, and he singles out Koch Industries, a chemical, fertilizer and refining juggernaut run by brothers David and Charles Koch, as the main culprit.
"The biggest deterrent to an energy plan in America is Koch Industries," he says. "They do not want an energy plan for America because they have the cheapest natural gas price they've ever had, and they're in the fertilizer business and they're in the chemical business. So their margins are huge. And they do not want you to have an energy plan, because if you had a plan, then natural gas prices would come up."
AP: Wyoming governor convinced Jackson to delay 'fracking' finding
The Associated Press scored a big scoop about fracking:
“Wyoming's governor persuaded the head of the U.S. Environmental Protection Agency to postpone an announcement linking hydraulic fracturing to groundwater contamination, giving state officials — whom the EPA had privately briefed on the study — time to attempt to debunk the finding before it rocked the oil and gas industry more than a month later, an investigation by The Associated Press has found.”
Sen. Blunt: Federal agencies didn’t get the ‘all of the above’ memo
Sen. Roy BluntRoy BluntSanders: GOP blocked 'Trump proposal' to lower drug prices McConnell: We'll start Obamacare repeal on day one Could bipartisanship rise with Trump government? MORE (R-Mo.) says President Obama’s employees aren’t really living up to the president’s claim to be pursuing an “all of the above” energy plan.
“Nobody that works for him seems to know that,” Blunt told a Columbia, Mo., radio station Wednesday, faulting the EPA and Interior and Energy Departments.
“We don’t have an all-of-the-above strategy even though the president is saying that we ought to be doing everything we can to become more energy self-sufficient,” Blunt said. “I think he is right with that goal. I just wish the rest of the government knew about it.”
Blunt is among the senators who have alleged the White House isn’t aggressively pursuing fossil fuels, and in the interview attacked decisions including the failure (thus far) to permit the Keystone XL oil pipeline. Check it out here here.
IN CASE YOU MISSED IT...
Here's a quick roundup of Thursday's E2 stories:
- Emails BoehnerJohn BoehnerBoehner compares Trump to Teddy Roosevelt Boehner: 'Thank God' I wasn't in the middle of election Ryan delays committee assignments until 2017 MORE-at-white-house-letter-to-boehner" href="http://thehill.com/blogs/e2-wire/e2-wire/225333-emails-show-epa-emails-show-epa-pique-at-white-house-letter-to-boehner-at-white-house-letter-to-boehner">show EPA frustration over White House letter to Boehner
- Automakers agree on 'single-port' charging system for electric cars
- Romney turns focus to energy in Virginia
- Lefty groups fear White House reg reform plan will slash green protections
- Romney ad hits Obama for ‘broken promises’ on energy policy