WASHINGTON -- President Donald Trump gave the go-ahead to the long-delayed Keystone XL pipeline on Friday, declaring it a "great day for American jobs" and siding with energy advocates over environmental groups in a heated debate over climate change.
The presidential permit comes nearly a decade after Calgary, Alberta-based TransCanada applied to build the $8 billion pipeline, which will snake from Canada through the United States. Trump's State Department said the project advances U.S. interests, a reversal of the conclusion former President Barack Obama's administration reached less than 18 months ago.
"It's a great day for American jobs and a historic moment for North America and energy independence," Trump said, standing alongside Trans-Canada's CEO, Russell Girling, in the Oval Office. Keystone will reduce costs and reliance on foreign oil while creating thousands of jobs, Trump said, adding: "It's going to be an incredible pipeline."
The decision caps the long scientific and political fight over a project that became a proxy battle in the larger debate over global warming. And Friday's decision, while long foreshadowed by Trump's public support for Keystone, represents one of the biggest steps to date by his administration to prioritize economic development over environmental concerns.
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"The fact is that this $8 billion investment in American energy was delayed for so long demonstrates how the American government has failed the American people," Trump said.
TransCanada, Trump said, can now build Keystone "with efficiency and with speed." Though it still faces other major hurdles, including disputes over the route, the president said the federal government was formulating final details "as we speak."
The 1,700-mile pipeline, as envisioned, would carry oil from tar sands in Alberta, Canada, to refineries along the Texas Gulf Coast, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma. It would move roughly 800,000 barrels of oil per day.
Environmentalists, American Indian groups and landowners who've opposed the pipeline expressed anger, and Greenpeace said the U.S. was "moving backwards" on climate and energy policy.
"Keystone was stopped once before, and it will be stopped again," vowed Annie Leonard, the group's U.S. director.
"We'll use every tool in the kit to stop this dangerous tar sands oil pipeline project," said Rhea Suh, president of the Natural Resources Defense Council.
Pipeline debate
The announcement Friday said the State Department "considered a range of factors, including but not limited to foreign policy; energy security; environmental, cultural, and economic impacts; and compliance with applicable law and policy."
The new secretary of state, Rex Tillerson, formerly chief executive of Exxon Mobil, had recused himself from the decision. The announcement said the permit was signed by the undersecretary of state for political affairs, Thomas Shannon Jr.
Obama in 2015 rejected the pipeline after years of study, saying it would undercut U.S. credibility in the international climate change negotiations that culminated later that year in a global deal in Paris. He echoed the argument of environmental groups that Keystone would encourage use of carbon-heavy tar sands oil, contributing heavily to global warming.
Relying mostly on the same information, the Trump administration reversed Obama's decision Friday.
In a lengthy report, the State Department alluded to the Paris deal as one reason. Because many other countries have pledged to address climate change, it said Keystone can proceed without undermining the overall effort to slow global warming. The Paris agreement compels the U.S. and other countries to cut greenhouse gas emissions in coming decades.
Keystone would strengthen U.S. energy security by increasing access to Canada's "dependable supply of crude oil," said the State Department, which had jurisdiction because the pipeline crosses the U.S.-Canada border.
But the level of those benefits has been the subject of exhaustive debate in recent years.
Obama argued the oil wouldn't stay in the U.S. because it would be exported after being processed in U.S. refineries. TransCanada insisted Keystone "is not an export pipeline." Many energy experts said the truth was somewhere in between.
Environmental groups argued that Canada's tar sands oil should stay in the ground. Mining the oil sands requires vast amounts of energy for extraction and processing.
In addition, interest among many companies in the oil sands is waning amid sluggish oil prices. Extraction from the oil sands, situated in the sub-Arctic boreal forest, is expensive. Statoil and Total, two European energy giants, have abandoned their production projects. In recent weeks, Royal Dutch Shell agreed to sell most of its oil sands assets for $8.5 billion. And Exxon Mobil wrote down 3.5 billion barrels of reserves, conceding the oil sands were not economically attractive enough to develop for the next few years at least.
Nevertheless, Canadian production continues to grow as projects that were conceived when prices were higher begin to operate. And the Keystone effort is central to the future of TransCanada, a major force in the Canadian oil patch.
Keystone's backers said the oil sands will be mined regardless of the pipeline. Without a pipeline, they said, the oil would move by rail or truck, more dangerous methods that themselves contribute greenhouse gas emissions.
Job creation
The U.S. Chamber of Commerce and other business groups applauded the administration's action. Jack Gerard, president and chief executive of the American Petroleum Institute, the primary industry lobbying arm, said the decision was "welcome news" and was "critical to creating American jobs, growing the economy and making our nation more energy secure."
How many jobs Keystone will create is widely disputed.
TransCanada promised as many as 13,000 construction jobs, and Trump once predicted it "could be 42,000 jobs." The vast majority would be "indirect" jobs that other industries gain from the influx of dollars and construction workers. Other estimates predict just a few thousand jobs, lasting only for the few years the pipeline is being built. After that, only a few dozen workers would be needed to maintain the pipeline.
Girling, the TransCanada CEO, said Friday that thousands of people are "ready and itching to get to work."
Trump said as recently as this week that Keystone would be built with American steel, which he has required for new or expanded pipelines. But his administration already has given Keystone a pass. TransCanada has already acquired the steel for the project, and the White House has said it's too difficult to impose Trump's requirement on a project already under construction.
Welspun Pipes Inc., which has its U.S. base of operations in Little Rock, has built hundreds of miles of pipe for the pipeline. When Obama stalled the project, Welspun, which is based in India, laid off about 60 workers at the Little Rock facility.
In January, U.S. Sen. Tom Cotton, R-Ark., said the revival of Keystone and another project, the Dakota Access pipeline, "will lower energy costs and create jobs across the country and in Arkansas at places like Welspun. Producing more American-made energy also makes us safer by decreasing our reliance on the turbulent Middle East."
Also in January, U.S. Rep. French Hill, R-Ark., praised Trump for "proving that he is serious about North American energy independence, job growth, and private infrastructure spending. ... Keystone has already produced over 600 jobs in central Arkansas and would create thousands of ready-to-launch private sector American jobs, while having a minimal impact on the environment."
Although portions of Keystone are already built, it still faces obstacles to completion. In Nebraska, for example, the route must still be approved, and opponents have repeatedly thwarted TransCanada's attempts to access the necessary land. A commission is expected to review the matter later this year.
Trump, told of the hiccup, pledged his help.
"Nebraska? I'll call Nebraska," he said.
Information for this article was contributed by Josh Lederman, Jill Colvin, Rob Gillies and Grant Schulte of The Associated Press; by Clifford Krauss of The New York Times; and by staff members of the Arkansas Democrat-Gazette.
A Section on 03/25/2017