Obama criticizes pro-Keystone pipeline jobs, gas price claims

President Obama said the proposed Keystone XL oil sands pipeline would not be a major job creator and could increase gasoline prices, but added that the White House decision will rest on climate change.

“Republicans have said that this would be a big jobs generator. There is no evidence that that’s true,” Obama said in a New York Times interview published Saturday.

Obama, in some of his most extensive remarks ever on the pipeline, also said Canada could “potentially be doing more” to curb emissions from the oil sands.

His comments follow his closely watched late June pledge that Keystone XL would only receive a federal permit if the “net” effects of the pipeline would not “significantly exacerbate” carbon pollution.

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Obama reiterated that threshold in the newly published interview and said that would be the basis for his decision.

“I meant what I said; I'm going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere. And there is no doubt that Canada at the source in those tar sands could potentially be doing more to mitigate carbon release,” he said.

Nonetheless, in the July 24 interview published Saturday, Obama took time to criticize several pro-Keystone arguments about economic benefits of TransCanada Corp.’s proposed project, which would bring oil from Canada’s oil sands projects to Gulf Coast refineries.

“[M]y hope would be that any reporter who is looking at the facts would take the time to confirm that 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 [chuckles] jobs in a economy of 150 million working people,” Obama said, according to a Times transcript.

He questioned the project’s benefit in other ways too as the State Department review continues. While State is leading the federal review, the final decision is expected to come from the West Wing.

“So what we also know is, is that that oil is going to be piped down to the Gulf to be sold on the world oil markets, so it does not bring down gas prices here in the United States. In fact, it might actually cause some gas prices in the Midwest to go up where currently they can’t ship some of that oil to world markets,” Obama said.

Pipeline backers say export claims have been exaggerated. And, they say, exporting some products refined in the U.S. with oil from Keystone would still be economically helpful anyway.

Obama, in the interview, also offered some praise for Keystone, noting, “there is a potential benefit for us integrating further with a reliable ally to the north our energy supplies.”

His emissions test for approving Keystone has prompted intense speculation about whether more aggressive environmental efforts by Canadian regulators and oil companies could help ensure the pipeline clears Obama's bar.

Asked if stronger steps by Canada to curb emissions from energy-intensive oil sands projects could “mitigate” concerns about Keystone, Obama largely demurred.

“We haven't seen specific ideas or plans. But all of that will go into the mix in terms of [Secretary of State] John Kerry’s decision or recommendation on this issue,” he said.

A draft State Department report in March heartened pipeline supporters by concluding that approving or rejecting Keystone would have little effect on the rate of expansion of carbon-intensive oil sands production.

But environmental groups are strongly challenging the finding, and the Environmental Protection Agency, in an April letter to the State Department, urged a more in-depth analysis.

Obama's comments arrive amid a ferocious political and lobbying battle over Keystone.

Obama, meeting behind closed doors with lawmakers in March, said that the project would not create as many jobs as backers say, according to members who were present.

But his public comments in the Times interview on jobs and other remarks will likely hearten opponents of the project and provide them fresh political ammunition.

350.org, a climate change advocacy group battling the pipeline, quickly disseminated Obama’s comments on Twitter Saturday evening.

Mike Hudema of Greenpeace, citing Obama's reiteration of his climate test for Keystone, said over the social media service that “I like these tea leaves.”