Keystone Pipeline Oklahoma

The Obama administration will deny the federal permit for the controversial Keystone XL pipeline, officials say.

Christi Parsons and Paul Richter
November 6, 2015

President Obama announced Friday that he was rejecting the controversial Keystone XL oil pipeline project because it wouldn’t serve U.S. interests, dismissing its potential economic benefits as insignificant over time as he sought to close a long-running chapter in the political fight over global warming.

“For years, the Keystone pipeline has occupied what I frankly consider an overinflated role in our political discourse,” Obama told reporters at the White House. “It became a symbol too often used as a campaign cudgel by both parties rather than a serious policy matter.”

The pipeline began as a project nearly a decade ago to carry more than 800,000 barrels of crude oil a day from Canada to U.S. Gulf Coast refineries, as a shortcut to bring it to market more quickly. But it grew over time into a political symbol: for opponents, of energy interests run amok, and for backers, of the zealous overreach of environmental advocates.

Opponents long warned about the negative effects of tar sands oil mining on wildlife and people. Construction of the pipeline would lock the U.S. into dependence on an oil that is destructive and hard to extract, foes said.

Supporters, meanwhile, argued in favor of the economic benefits. They pointed to the jobs that the construction of the pipeline would create as well as to the stream of North American oil as an important alternative to Middle Eastern sources. But a State Department study found that the pipeline would create only about 35 permanent jobs after construction was complete.

And fluctuating oil prices affect the economics of tar sands oil, which is difficult and costly to extract. At some points over the past year, the price of oil dropped below the point that would allow Keystone investors to break even.

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