The People of America's Oil and Natural Gas Indusry

An Illogical Decision, Not An Arbitrary Deadline

Mark Green

Mark Green
Posted January 19, 2012

In announcing his rejection of the Keystone XL permit, President Obama said:

"This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I'm disappointed that Republicans in Congress forced this decision, but it does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil."

Let's leave the politics aside and focus on the facts.

About the "arbitrary nature" of the congressionally imposed deadline – requiring the president to do his job and decide, simply, whether the Keystone XL is in the national interest – the pipeline is in its fourth year of review, well beyond the 18 months to two years the approval process typically takes.

During that time the project has successfully cleared three consecutive environmental reviews conducted by the State Department -- including multiple public hearings, consideration of 14 different routes and 57 special conditions exceeding current federal pipeline regulations that were agreed to by builder TransCanada. 

This past summer the White House said that the State Department was committed to reaching a decision "before December 31, 2011."  But then in December, the White House arbitrarily put off the decision a year, prompting Congress to pass, and the president to sign, legislation requiring a decision within 60 days.  Was that period too short?  Sen. Richard Lugar notes:

"In a usual permit review, the State Department will take up to 90 days to formulate their National Interest Determination after a Final Environmental Impact Statement (EIS) is issued.  Thereafter, Federal Agencies have an additional 15 days for final comments. The Keystone XL Final EIS was issued on August 26, 2011, so the State Department was already 75 days into its final review when the White House punted a decision until after the 2012 election."

In other words, an additional 60 days was more than enough time to finish the National Interest Determination.  The deadline was sound, the benefits are clear – the only thing arbitrary here is the decision to reject jobs, security and energy from a strong ally.

The president's disappointed? Not nearly as disappointed as American workers who were counting on the 20,000 U.S. jobs the Keystone XL would create during its construction phase. Laborers' International Union of North America General President Terry O'Sullivan:

"We are completely and totally disappointed. This is politics at its worst...Blue collar construction workers across the U.S. will not forget this."

Moving on to the last part of the president's statement, what exactly is his Administration's “commitment” to American-made energy?

Is it the permitting slowdown in the Gulf that led to the departure of 11 rigs and more than $21 billion in capital investments?

Is it the permitting, leasing and drilling slowdown on federal lands in western states that has cost us production, jobs and millions in federal and state tax revenues, royalties and lease payments? A slowdown, by the way, not seen on private lands, which means it’s a policy-driven slowdown, not an economic-driven problem.

Is it a a five-year plan that raises royalty rates and places most of our offshore resources off-limits, a step back from the president's previous announcement that we would expand offshore access?

Or is it the eight federal agencies now considering duplicative regulations on hydraulic fracturing, the process upon which rests 69 percent of future natural gas production?

If this is a commitment to American-made energy, then please, do change.


Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.