Obama expresses scepticism over Keystone pipeline

http://www.theguardian.com/us-news/2014/dec/19/obama-expresses-scepticism-over-keystone-pipeline

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US President Barack Obama has delivered his most sceptical remarks yet on the future of the Keystone oil pipeline, claiming its controversial extension from Canada to Nebraska would do little to reduce American energy prices and generate only a limited number of US jobs, but could add to the infrastructure costs of climate change.

Speaking during an end-of-year press conference just one day after Republicans promised fresh legislation designed to force the project’s approval, the president departed from official White House neutrality on an upcoming review by the State Department to deliver a withering assessment of its merits, claiming his opponents were wrong to insist the pipeline was a “magic formula” for economic growth.

“At issue in Keystone is not American oil; it is Canadian oil that is drawn out of tar sands in Canada,” he said when asked if he was minimising the benefits. “That oil currently is being shipped out through rail or trucks, and it would save Canadian oil companies and the Canadian oil industry an enormous amount of money if they could simply pipe it all the way through the United States down to the Gulf.”

Seemingly aware of the impact his unusually blunt language may have on the politically-charged debate over whether environmental or economic arguments should prevail, Obama checked himself briefly but left reporters in little doubt of his strong feelings on the issue.

“So there’s no – I won’t say no – there is very little impact, nominal impact, on US gas prices, what the average American consumer cares about, by having this pipeline come through,” he said. “Sometimes the way this gets sold is, you know, ‘Let’s get this oil, and it’s going to come here,’ and the implication is that that’s going to lower gas prices here in the United States. It’s not.”

Despite pressure from US producers who claim the Keystone XL extension would benefit them too, Obama added: “There’s a global oil market. It’s very good for Canadian oil companies, and it’s good for the Canadian oil industry, but it’s not going to be a huge benefit to US consumers. It’s not even going to be a nominal benefit to US consumers.”

Republicans, who argue the pipeline would create large numbers of jobs, announced this week that they plan to pass legislation authorising the extension when they take control of the Senate next month.

Obama refused to say whether he would definitely block such a bill – a presidential veto which would need two-thirds of Congress to override – but insisted the employment benefits had been “hyped” out of proportion.

“The construction of the pipeline itself will create probably a couple thousand jobs. Those are temporary jobs,” he said.

“There’s probably some additional jobs that can be created in the refining process down in the Gulf. Those aren’t, you know, completely insignificant. But when you consider what we could be doing if we were rebuilding our roads and bridges around the country, something that Congress could authorise, we could probably create hundreds of thousands of jobs or a million jobs.”

The pipeline’s backers are currently waiting for a court verdict from Nebraska on whether their route is permissible, and it is unclear whether a Senate vote on the matter would come before or after a planned State Department environmental review.

Nevertheless, the White House has shown growing willingness to defy energy interests in the weeks since November’s midterm elections, and Obama echoed some of the environmental arguments he used when agreeing to major new climate change targets with China.

“I want to make sure that if in fact this project goes forward, that it’s not adding to the problem of climate change, which I think is very serious and does impose serious costs on the American people, some of them long term,” he told the press conference. “If we got more flooding, more wildfires, more droughts, there are direct economic impacts in that and as we’re now rebuilding after Sandy, for example, we’re having to consider how do we increase preparedness – that’s an example of the kind of costs that are imposed and you can put a dollar figure on it.”

Yet despite Obama’s growing scepticism over what has been a symbolic decision for environmentalists and industrialists alike, the president also used his opening remarks to praise America’s newfound energy self-sufficiency.

“America is now the number one producer of oil, the number one producer of natural gas,” he said in opening remarks designed to emphasise a recent recovery in the job market. “We’re saving drivers about 70 cents a gallon at the pump over last Christmas.”

Otherwise, the shorter-than-usual press conference focused mainly on North Korea’s alleged role in attacking Sony and a reaffirming of recent comments on Cuba and US race relations. The first family flies to Hawaii on Friday night for a two-week vacation.