Obama Rejected the Keystone XL Pipeline

By Roy L Hales


He does not believe this project will make a meaningful long-term contribution to America’s economy, lower gas prices or increase America’s energy security. What it could do is undercut the nation’s global leadership in the fight against Climate Change. This morning, President Barack Obama Rejected the Keystone XL Pipeline.

Deference to Environmental Concerns

Keystone XL Pipeline Protest at the White House Washington, DC November 6, 2011 Photograph by Emma Cassidy, tarsandsaction via Flickr (CC BY SA, 2.0 License)
Keystone XL Pipeline Protest at the White House Washington, DC,  November 6, 2011 Photograph by Emma Cassidy, tarsandsaction via Flickr (CC BY SA, 2.0 License)

“This was very clearly a deference by the President to environmental concerns and, to a great extent, the protests by environmental groups. They have been marching and protesting in front of the White House about the Keystone issue for some time. They probably managed to raise the perceived importance of the environmental stakes even beyond what they really are,” said Professor Paul Quirk, from the Department of Political Science at the University of British Columbia.

Obama referred to the pipelines “overinflated role in our political discourse” this morning, then went on to say:

“Shipping dirtier crude oil into our country would not increase America’s energy security. What has increased America’s energy security is our strategy over the past several years to reduce our reliance on dirty fossil fuels from unstable parts of the world. Three years ago, I set a goal to cut our oil imports in half by 2020. Between producing more oil here at home, and using less oil throughout our economy, we met that goal last year — five years early. In fact, for the first time in two decades, the United States of America now produces more oil than we buy from other countries.”


“Now, the truth is, the United States will continue to rely on oil and gas as we transition — as we must transition — to a clean energy economy. That transition will take some time. But it’s also going more quickly than many anticipated. Think about it. Since I took office, we’ve doubled the distance our cars will go on a gallon of gas by 2025; tripled the power we generate from the wind; multiplied the power we generate from the sun 20 times over. Our biggest and most successful businesses are going all-in on clean energy. And thanks in part to the investments we’ve made, there are already parts of America where clean power from the wind or the sun is finally cheaper than dirtier, conventional power.”

Obama Informs Trudeau

Prior to making his announcement, Obama called Prime Minister Justin Trudeau:

“And while he expressed his disappointment, given Canada’s position on this issue, we both agreed that our close friendship on a whole range of issues, including energy and climate change, should provide the basis for even closer coordination between our countries going forward. And in the coming weeks, senior members of my team will be engaging with theirs in order to help deepen that cooperation.”

The Keystone XL May Not Be Dead

This does not necessarily bring the Keystone XL pipeline proposal to an end. The final decision on this project could be made during the 2016 Presidential election.

“Congress passed a law, with considerable support from Democrats, requiring approval of the pipeline. The President vetoed that, but it does indicate that the balance of power in Congress is in favour of the pipeline. If a Republican wins the election in 2016, they will put the pipeline back on the table if TransCanada is still interested,” said Professor Quirk.

TransCanada Responds

The Calgary Herald carried a press release from TransCanada in which Russ Girling, the President and CEO of TransCanada, is quoted as saying:

“Today, misplaced symbolism was chosen over merit and science – rhetoric won out over reason.

“The U.S. consumes over seven million barrels per day more oil than it produces and will continue to do so for decades, even despite U.S. oil production increases. It is disappointing the administration appears to have said yes to more oil imports from Iran and Venezuela over oil from Canada, the United States’ strongest ally and trading partner, a country with rule of law and values consistent with the U.S.

In another release, on the TransCanada website, Girling said, “We will review our options to potentially file a new application for border-crossing authority to ship our customer’s crude oil, and will now analyze the stated rationale for the denial.”

Environmentalists Respond

Bill McKibben at 2011 Protest in Washington by Elvert Barnes Protest Photography via Flickr (CC BY SA , 2.0 License)
Bill McKibben at 2011 Protest in Washington by Elvert Barnes Protest Photography via Flickr (CC BY SA , 2.0 License)

“For the first time, a pipeline has been rejected because it puts our climate at risk – a litmus test that the new Canadian government should adopt,” said Adam Scott of Environmental Defence.

“Today’s decision by President Obama reiterates that climate change is a key consideration for all energy infrastructure projects going forward,” said Simon Dyer, Alberta director at the Pembina Institute.

“We weren’t supposed to win this fight. When Keystone XL was proposed more than seven years ago, conventional wisdom — from oil industry insiders to the media and politicians — claimed it was inevitable. When the environmental movement stood up and said “Not so fast!” in a loud and unified voice, they said we were fighting a lost cause,” said Michael Brune, of the Sierra Club.

“We have prevailed against powerful entrenched interests and incredible odds to achieve one of the most significant victories our movement has accomplished in years,” said Erica Pica, of Friends of the Earth US.

“This is a day of celebration,” said Bill McKibben of the environmental group 350.org

What Did They Win?

BNSF oil train, Auburn, WA Nearly two miles of oil cars, stretching from downtown Auburn most of the way to the White River bridge. Nothing unusual these days - by joshua_putnam via Flickr (CC BY SA, 2.0 License)
BNSF oil train, Auburn, WA Nearly two miles of oil cars, stretching from downtown Auburn most of the way to the White River bridge. Nothing unusual these days – by joshua_putnam via Flickr (CC BY SA, 2.0 License)

Professor Quirk describes the environmental victory as more symbolic than real.

“Environmental groups managed to make this a test case for the commitment to action against Climate Change. If Obama approved the pipeline, it would have been taken as a serious departure from environmental policy,” he said.

“(Stopping) the Keystone XL will not make a change in the amount of oil that is being produced. The State Department actually did this analysis, to investigate the environmental footprint depending on whether or not this pipeline is built, and they found that a lot of the oil is already being transported by rail, ” added  Professor Werner Antweiler, from UBC’s Sauder school of Business.

“Mostly what you would have seen through the pipeline is a shift of transportation modes. The oil that is currently being transported by rail, which is expensive, would shift to pipelines, which is cheaper.”

“The real game changer is the price of oil. Many of the projects that were planned for expansion are being mothballed.”

What Does This Mean For Canada?

Professor Antweiler pointed out Obama’s announcement puts more pressure on alternative routes. This is especially likely with the Canada East and Trans Mountain pipeline projects, which are connected to existing infrastructure.

“The previous government has badly handled this file by creating a lobby for it without making any concessions to the carbon footprint, said Antweiler.

As the oil was meant to be shipped overseas, “There was very little gain economically for the United States.”

“Now that there is a new government in Ottawa, I think the door is open for more technical discussions. There is an intimate link between our fighting Climate Change and continuing to be one of the major producers of fossil fuels. As a producer of fossil fuels comes a responsibility and as a nation we must meet that challenge. That provides the license for these projects to go ahead,” said Antweiler.

Many environmentalists believe this dual role is not possible.

“This rejection sets an important new precedence in the run-up to the Paris climate summit. We have hope that the Prime Minister will accept that we cannot protect the climate and approve new pipelines at the same time,” said Adam Scott.

“Prime Minister Trudeau can demonstrate real climate leadership by implementing a legislated oil tanker ban for B.C.’s north coast that puts an end to Enbridge’s Northern Gateway proposal for once and for all, and by fulfilling his campaign promise to overhaul the federal environmental review process such that the Kinder Morgan pipeline proposal is considered on the basis of its climate impacts. It’s time for a new approach to pipelines in Canada that takes climate change seriously. Because it’s 2015,”  said Caitlyn Vernon of Sierra Club BC .

Top Photo Credit: President Barack Obama walks through the Oval Office as seen from the Rose Garden of the White House, Nov. 4, 2015. (Official White House Photo by Pete Souza)