Keystone XL pipeline application rejected by Obama administration, will it hurt his reelection chances?

The Obama administration rejected the application of a Canadian firm TransCanada to build the Keystone XL pipeline. The issue has become a national political story, sparking rebukes from both left and right of Obama’s handling of the issue. As Juliet Eilperin and Steven Mufson reported:

President Obama, declaring that he would not bow to congressional pressure, announced Wednesday that he was rejecting a Canadian firm’s application for a permit to build and operate the Keystone XL pipeline, a massive project that would have stretched from Canada’s oil sands to refineries in Texas.

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 The controversial Keystone XL pipeline has been under review for more than three years. Environmental groups have argued that the extraction of oil sands contributed to climate changes and the pipeline itself posed leak risks. Supporters of the pipeline say that it will create jobs and enhance energy security. Here’s a look at some of the key players in the pipeline plan and the protests against it.

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House Speaker John Boehner says President Barack Obama is breaking his promise to create jobs by rejecting a plan to build an oil pipeline from Canada to Texas. (Jan. 18)

Obama said that a Feb. 21 deadline set by Congress as part of the two-month payroll tax cut extension had made it impossible to do an adequate review of the pipeline project proposed by TransCanada.

“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,” the president said in a statement.

The decision and the language that accompanied it made clear that the White House, far from deflecting a political issue until after the election, was fully engaged in a battle with pipeline proponents. Obama said that his administration had worked to improve energy security through higher fuel-efficiency standards, and that it would explore ways to relieve the pipeline bottleneck slowing oil shipments between a major terminal in Cushing, Okla., and the nation’s gulf coast refineries.

The administration will allow TransCanada to reapply for a permit after it develops an alternate route around the sensitive habitat of Nebraska’s Sandhills. The administration’s decision includes language making it clear that TransCanada can reapply, stating, “The determination does not preclude any subsequent permit application or applications for subsequent projects.”

Industry officials and analysts said they expect TransCanada to submit a new route proposal for the Nebraska leg of the pipeline within two weeks. TransCanada declined to comment on the matter Wednesday.

So what is next for the Keystone XL pipeline after their initial failure? As Ezra Klein wrote:

As my colleagues Juliet Eilperin and Steven Mufson report, the Obama administration is all set to officially nix the Keystone XL pipeline, which would’ve carried oil from Canada’s tar sands down to the Gulf Coast. So why did Obama reject it? And what happens next?

White House officials have blamed Republicans in Congress for imposing an arbitrary deadline on the project that made a proper review of the pipeline all but impossible. Back in November, President Obama said that the Keystone pipeline needed to be rerouted in response to concerns that leaks could taint Nebraska’s water supplies. That process would’ve stretched into 2013, past the election. And so, in last month’s payroll tax cut extension, Republicans included a provision that forced the administration to make a final decision on the pipeline by Feb. 21 of this year. White House officials bristled at what spokesman Jay Carney called “an attempt to short-circuit the review process.” And, in the end, the administration decided to block the project outright.