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Obama puts Keystone pipeline on hold, decries 'rushed and arbitrary' deadline

Speaker Boehner accuses Obama of 'selling out American jobs for politics,' but Keystone pipeline operator TransCanada says it will submit plans for a rerouted project later this year.

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“Plans are already underway on a number of fronts to largely maintain the construction schedule of the project,” Mr. Girling said.

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The US oil and gas industry has long been critical of the Obama administration over decisions related to permitting, starting with the moratorium on deepwater drilling that followed the 2010 oil spill in the Gulf of Mexico. In remarks given at the US Energy Association forum in Washington Wednesday, Jack Gerard, president of the American Petroleum Institute, linked the Keystone project with increased economic security.

“The US seems to lack one thing: the political will to act,” Mr. Gerard said. “When it comes to domestic resources, what we hear and what we see … are often two different things.”

As proposed, the Keystone XL pipeline was to carry diluted bitumen – an acidic crude oil derived from tar sands – from the Western Canadian Sedimentary Basin in Alberta, Canada, the largest and richest source of petroleum in North America, to refineries and distribution terminals in Nederland and Port Arthur Tex., two major crude oil marketing hubs near the Gulf coast. The pipeline, 36 inches in diameter, was designed to stretch 1,700 miles at the cost of $7 billion.

The proposal the president rejected was actually an extension of an existing pipeline that currently carries oil from Canada, across the Great Plains states and into Illinois. The two new sections would have delivered oil through South Dakota, Nebraska, Kansas, Oklahoma, and Texas.

Last year the State Department approved the proposal, but differed with TransCanada on some key issue such as estimates of the number of jobs that would be created. The company promised 22,000 new construction jobs and an additional 118,000 indirect jobs, while a State Department report estimated far less. The agency’s environmental assessment also estimated that the maximum the Keystone XL could potentially spill would be 2.8 million gallons along an area of 1.7 miles.

Environmental groups were vehement in their opposition to the pipeline, saying corrosion leads to dangerous leaks and extracting petroleum from tar sands creates more greenhouse emissions than conventional oil production. Groups representing farmers and ranchers were also largely in opposition.

Frances Beinecke, president of the National Resources Defense Council, an environmental group based in Washington, described Obama’s decision as “a triumph of truth over Big Oil’s bullying tactics and its disinformation campaign with wildly exaggerated jobs claims.”

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