Obama Rejects Construction of Keystone XL Oil Pipeline

By CORAL DAVENPORT

President Obama announced on Friday that he had rejected the request from a Canadian company to build the Keystone XL oil pipeline, ending a seven-year review that had become a symbol of the debate over his climate policies.

Mr. Obama’s denial of the proposed 1,179-mile pipeline, which would have carried 800,000 barrels a day of carbon-heavy petroleum from the Canadian oil sands to the Gulf Coast, comes as he seeks to build an ambitious legacy on climate change. “America is now a global leader when it comes to taking serious action to fight climate change,’’ Mr. Obama said in remarks from the White House. “And frankly, approving this project would have undercut that global leadership.’’

The move was made ahead of a major United Nations summit meeting on climate change to be held in Paris in December, when Mr. Obama hopes to help broker a historic agreement committing the world’s nations to enacting new policies to counter global warming. While the rejection of the pipeline is largely symbolic, Mr. Obama has sought to telegraph to other world leaders that the United States is serious about acting on climate change.

The once-obscure Keystone project became a political symbol amid broader clashes over energy, climate change and the economy. The rejection of a single oil infrastructure project will have little impact on efforts to reduce greenhouse gas pollution, but the pipeline plan gained an outsize profile after environmental activists spent four years marching and rallying against it in front of the White House and across the country. Mr. Obama said that the pipeline has occupied what he called “an overinflated role in our political discourse.’’ “It has become a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter,’’ he said. “And all of this

obscured the fact that this pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others.’’

The rejection of the pipeline is one of several actions Mr. Obama has taken as he intensifies his push on climate change in his last year in office. In August, he announced his most significant climate policy, a set of aggressive new regulations to cut emissions of planet-warming carbon pollution from the nation’s power plants.

Republicans and the oil industry had demanded that the president approve the pipeline, which they said would create jobs and stimulate economic growth. Many Democrats, particularly those in oil-producing states such as North Dakota, also supported the project. In February, congressional Democrats joined with Republicans in sending Mr. Obama a bill to speed approval of the project, but the president vetoed the measure. Both sides saw the Keystone rejection as a major symbolic step, a sign that the president was willing to risk angering a bipartisan majority of lawmakers in the pursuit of his environmental agenda. And both supporters and critics of Mr. Obama saw the surprisingly powerful influence of environmental activists in the decision.

“Once the grass-roots movement on the Keystone pipeline mobilized, it changed what it meant to the president,” said Douglas G. Brinkley, a historian at Rice University who writes about presidential environmental legacies. “It went from a routine infrastructure project to the symbol of an era.” Environmental activists cheered the decision as a vindication of their influence.

“President Obama is the first world leader to reject a project because of its effect on the climate,’’ said Bill McKibben, founder of the activist group 350.org, which led the campaign against the pipeline. “That gives him new stature as an environmental leader, and it eloquently confirms the five years and millions of hours of work that people of every kind put into this fight.’’

Environmentalists had sought to block construction of the pipeline because it would have provided a conduit for petroleum extracted from the Canadian oil sands. The process of extracting that oil produces about 17 percent more planet-warming greenhouse gases than the process of extracting conventional oil.

But numerous State Department reviews concluded that construction of the pipeline would have little impact on whether that type of oil was burned, because it was already being extracted and moving to market via rail and existing pipelines. In citing his reason for the decision, Mr. Obama noted the State Department findings that construction of the pipeline would not have created a significant number of new jobs, lowered oil or gasoline prices or significantly reduced American dependence on foreign oil. “From a market perspective, the industry can find a different way to move that oil,” said Christine Tezak, an energy market analyst at ClearView Energy Partners, a Washington firm. “How long it takes is just a result of oil prices. If prices go up, companies will get the oil out.”

However, a State Department review also found that demand for the oil sands fuel would drop if oil prices fell below $65 a barrel, since moving oil by rail is more expensive than using a pipeline. An Environmental Protection Agency review of the project this year noted that under such circumstances, construction of the pipeline could be seen as contributing to emissions, since companies might be less likely to move the oil via expensive rail when oil prices are low — but would be more likely to move it cheaply via the pipeline. The price of oil has plummeted this year, hovering at less than $50 a barrel. The recent election of a new Canadian prime minister, Justin Trudeau, may also have influenced Mr. Obama’s decision. Mr. Trudeau’s predecessor, Stephen Harper, had pushed the issue as a top priority in the relationship between the United States and Canada, personally urging Mr. Obama to approve the project. Blocking the project during the Harper administration would have bruised ties with a crucial ally. While Mr. Trudeau also supports construction of the Keystone pipeline, he has not made the issue central to Canada’s relationship with the United States, and has criticized Mr. Harper for presenting Canada’s position as an ultimatum, while not taking substantial action on climate change related to the oil sands.

Mr. Trudeau did not raise the issue during his first post-election conversation with Mr. Obama.

The construction would have had little impact on the nation’s economy. A State Department analysis concluded that building the pipeline would have created jobs, but the total number represented less than one-tenth of 1 percent of the nation’s total employment. The analysis estimated that Keystone would support 42,000 temporary jobs over its two-year construction period — about 3,900 of them in construction and the rest in indirect support jobs, such as food service. The department estimated that the project would create about 35 permanent jobs. Republicans and the oil industry criticized Mr. Obama for what they have long said was his acquiescence to the pressure of activists and environmentally minded political donors. “A decision this poorly made is not symbolic, but deeply cynical,’’ said Senator Lisa Murkowski, the Alaska Republican who leads the Senate Energy and Natural Resources Committee. “It does not rest on the facts — it continues to distort them.’’

Jack Gerard, the head of the American Petroleum Institute, which lobbies for oil companies, said in a statement, “Unfortunately for the majority of Americans who have said they want the jobs and economic benefits Keystone XL represents, the White House has placed political calculations above sound science.’’

Russ Girling, the president and chief executive of TransCanada, said in a statement that the president’s decision was not consistent with the State Department’s review. “Today, misplaced symbolism was chosen over merit and science,’’ said Mr. Girling, whose company is based in Calgary, Alberta. “Rhetoric won out over reason.’’ The statement said that the company was reviewing the decision but offered no indication if it planned to submit a new application. If a Republican wins the 2016 presidential election, a new submission of the pipeline permit application could yield a different outcome.

“President Obama’s rejection of the Keystone XL pipeline is a huge mistake, and is the latest reminder that this administration continues to prioritize the demands of radical environmentalists over America’s energy security,’’ said Senator Marco Rubio of Florida, who is seeking the Republican nomination for president. “When I’m president, Keystone will be approved, and President Obama’s backward energy policies will come to an end.’’

As Mr. Obama seeks to carve out a substantial environmental legacy, his decision on the pipeline pales in import compared with his use of Environmental Protection Agency regulations. The power plant rules he announced in August have met with legal challenges, but if they are put in place, they could lead to a transformation of the nation’s energy economy, shuttering fossil fuel plants and rapidly increasing production of wind and solar.

Those rules are at the heart of Mr. Obama’s push for a global agreement. But advocates of the agreement said that the Keystone decision, even though it is largely symbolic, could show other countries that Mr. Obama is willing to make tough choices about climate change.

“The rejection of the Keystone permit was key for the president to keep his climate chops at home and with the rest of the world,” said Durwood Zaelke, the president of the Institute for Governance and Sustainable Development, a Washington research organization.