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The Obama administration last week denied an oil company’s application to expand an existing pipeline network between the United States and Canada.

It was the right decision for many reasons, although President Obama’s statement tied it solely to a legislative stunt pulled last month by congressional Republicans.

During political maneuvering over extending payroll tax reductions and unemployment benefits, Republicans inserted a clause setting a February deadline for a decision on the controversial cross-border Keystone XL pipeline. The State Department, however, already had said it would take until 2013 to complete its review of the controversial application. The Republicans’ rushed timetable, the president said last Wednesday, doomed the project.

Calgary-based TransCanada, which applied for the expansion permit, has indicated that it will file a new application. In the meantime, here are some points to bear in mind:

Heavy, hot, corrosive crude oil from tar sands deposits in northern Alberta already is slogging from Canada to the United States in TransCanada’s existing 1,600-mile pipeline system, sometimes called Keystone 1. It crosses three Canadian provinces and seven U.S. states.

Another operational spur of Keystone 1 drops down to Cushing, Okla., a major choke-point for oil pipelines. President Obama’s statement acknowledged the need to develop additional pipeline capacity between Cushing and oil refineries on the U.S. Gulf Coast. Such an extension would not require a federal construction permit because it would not cross an international border.

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Aspects of the State Department’s earlier, incomplete review of the Keystone XL expansion proposal were tainted. For example, emails released as a result of Freedom of Information Act requests documented numerous questionable contacts between government officials and a TransCanada lobbyist who had worked on the 2008 presidential campaign of Secretary of State Hillary Clinton.

The whiff of conflict of interest also had attached itself to the proposal’s environmental impact statements, which the Environmental Protection Agency had found seriously deficient. Those documents were prepared for TransCanada, with State Department clearance, by a company with which it has a long-standing financial relationship.

Job creation has been a key part of the sales pitch for Keystone XL, touted by TransCanada, the oil, chemical, minerals and mining industries, Republicans, some Democrats and labor unions.

Not surprisingly, a company hired by TransCanada dutifully produced a report touting the equivalent of 120,000 full-time jobs, but a State Department analysis found only about 2,500 jobs per year for two years. Other studies pointed out that pipeline construction is fairly specialized work and would require experienced crews rather than unemployed local workers along the pipeline route.

In any case, an analysis by Cornell University’s School of Industrial and Labor Relations was unable to find independent verification of the TransCanada-subsidized numbers and found them wildly inflated.

Yes, Obama had hoped to avoid making a decision on Keystone XL until after November’s election; environmentalists in his political base oppose the pipeline, and some of his union backers support it.

But if Republicans had hoped to back the president into a political corner by creating an artificial deadline for a decision, they actually gave him a perfect excuse to say no – and someone else to blame for it.

 

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