Canada-Texas oil pipeline gets preliminary State Department nod

The Obama administration on Friday took a key step toward approving construction of the controversial Keystone XL project, a 1,700-mile, $7 billion pipeline that would bring 700,000 barrels of oil per day from Canada to Texas.

The State Department, which has final say over whether the project is in the national interest, issued an environmental-impact statement that said the pipeline would not significantly hurt the environment, a legal step that kicks off a 90-day review period and sets the stage for a final decision by the end of the year. But environmentalists passionately oppose the pipeline, which would create a new market for one of the dirtiest forms of energy in the world.

State Department officials repeatedly said that that the statement does not represent a final decision on the project, and should not be read as an indication that the administration will ultimately green-light the pipeline. But both the oil industry and environmentalists called the decision a clear sign that the administration is moving toward giving a final permit to the project later this year.

The oil industry and Republicans in Congress have seized on the pipeline as a project that would open U.S. access to one the biggest oil reserves in the world, and slash U.S. dependence on oil from overseas. The CIA estimates that the Western Canadian basin holds 175.2 billion barrels of oil, and the Keystone pipeline could bring up to 700,000 barrels of that oil a day to the U.S.-about half the amount the U.S. imports from the Middle East. Republicans have slammed the Obama administration for not moving more quickly to approve the project-which would ultimately extend from Hardisty, Alberta, to Port Arthur, Texas-charging that blocking the pipeline would keep the U.S. dependent on foreign oil and prevent a project that could create jobs and lower gas prices.

"This affirmation of the pipeline's safety puts us one step closer to construction, but the American people are still waiting on the president for action," said House Energy and Commerce Chairman Fred Upton, R-Mich., a GOP point man against Obama's energy policies. "This pipeline project is about increasing our energy security and putting America back to work. Completion of the Keystone XL pipeline extension will bring over 1.4 million barrels of oil per day into U.S. markets and create more than 100,000 American jobs.... Unless we take immediate action, we risk losing this valuable oil supply to energy-hungry countries like China."

The oil in the Western Canadian basin is not in conventional wells, but rather imbued in tar sands. Production of tar-sands oil, which is combined with sand, clay, and water in a dense, gooey mix, is one of the most environmentally destructive modes of fossil-fuel extraction. It produces 30 percent to 70 percent more of the greenhouse gases that cause climate change than production of conventional oil, requires the stripping of thousands of acres of arboreal forest, and creates floods of toxic runoff.

Over the past week, hundreds of environmentalists have staged a sit-in protest in front of the White House begging Obama not to approve the pipeline, and more than 300 have been arrested.

The final decision will come as the 2012 campaigns shift into high gear. President Obama has made a series of moves aimed at positioning himself closer to the center on energy and environmental issues, such as clearing hurdles to new offshore Arctic drilling, and delaying new rules on industrial air pollutants.

The National Wildlife Federation slammed Friday's environmental-impact statement as a "flawed review" giving a "rubber stamp" to the project. "Once again, the State Department has failed to do its homework, and they're leaving the American public to suffer the consequences," said Susan Casey-Lefkowitz, international program director for the group Natural Resources Defense Council.

"It is utterly beyond me how the administration can claim the pipeline will have 'no significant impacts' if they haven't bothered to do in-depth studies around the issues of contention. The public has made their concerns clear and the administration seems to have ignored them. If permitted, the proposed Keystone XL tar sands pipeline will be a dirty legacy that will haunt President Obama and Secretary [of State Hillary Rodham] Clinton for years to come."

In a statement, the Sierra Club bemoaned: "State Department endorses dirty tar-sands monstrosity."

Although the State Department's environmental-impact statement does outline many environmental concerns with the project, it concludes that he project would not have a "significant" environmental impact and notes that the agency's "preferred alternative" is construction of the pipeline with some modifications from the original plan. And it acknowledged that the Canadian oil will be harvested regardless of the pipeline's fate. "The proposed project is not likely to impact the amount of crude oil produced from the oil sands," the statement said.

"This is not a rubber stamp for the project. It should not be seen as a lean in either direction," said Assistant Secretary Kerri-Ann Jones of the State Department's Bureau of Oceans and International Environmental and Scientific Affairs.

Over the next three months, the heads of eight other government agencies must also approve the project, while the State Department holds public hearings in the states through which the pipeline will pass, including Texas, Kansas, Montana, Nebraska, South Dakota, and Oklahoma.

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