President Barack Obama announced today that his administration is rejecting the application for the Keystone XL Pipeline, which would take oil sands from Alberta, Canada to the Gulf Coast of the U.S. In a statement I’ve posted after the jump, the president blamed Congressional Republicans, who attached a “rushed and arbitrary deadline” for the Keystone decision to the temporary payroll tax cut extension bill in December.

Obama’s decision takes the pipeline off the table for now. House Republicans may look for ways to override the administration’s decision, but the Democratic-controlled Senate is unlikely to approve such legislation this year. However, all bets are off after the 2012 elections. TransCanada may resubmit its application after finding a different route through Nebraska.  

By this summer, I predict that “Keystone” will be a household word in the U.S., as Republicans and corporate-funded groups blame Obama’s decision for rising gasoline prices and continued high unemployment. Environmental groups that have opposed the pipeline have a huge public education task on their hands.

UPDATE: I’ve added Representative Steve King’s reaction after the jump.

The White House

Office of the Press Secretary

For Immediate Release

January 18, 2012

Statement by the President on the Keystone XL Pipeline

Earlier today, I received the Secretary of State’s recommendation on the pending application for the construction of the Keystone XL Pipeline.  As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment.  As a result, the Secretary of State has recommended that the application be denied.  And after reviewing the State Department’s report, I agree.

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.  Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down.  In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security –including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico– even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas.  And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment.

UPDATE: Statement from Representative Steve King’s office:

FOR IMMEDIATE RELEASE            

January 18, 2012                                                            

King: Oil Will Be Sent to China if the Keystone XL Pipeline isn’t Built

Washington, DC: Congressman Steve King (IA-05) released the following video statement in response to President Obama’s decision to deny the permit to build the job creating Keystone XL pipeline:

“If we block it, that oil will certainly go to China. It will enrich their economy,” said King. “It will starve ours and it’s clear that the President is pacifying his environmental extremist base and at the cost of American jobs and the vitality of America’s economy. This is a foolish decision on the part of the President. We’re going to have to do all we can in this Congress to reverse that decision, but I fear we’ll have to elect a new President before we can actually accomplish that task.”

UPDATE: Alain Sherter’s report for CBS News shows how exaggerated the jobs claims for Keystone have been:

Transcanada (TRP), the energy giant bidding to build the pipeline, projects the undertaking would create 20,000 jobs in the U.S., including 13,000 positions in construction and 7,000 in manufacturing.

That figure, based on a report by a consulting firm hired by Transcanada to assess the project’s economic impact, has been widely cited by Keystone backers on Capitol Hill. […]

But subsequent analysis suggests that Keystone’s job-creating potential is more modest. The U.S. State Department calculated last year that the underground pipeline would add 5,000 to 6,000 U.S. jobs. One independent review of Keystone puts that number even lower, with the Cornell University Global Labor Institute finding that the pipeline would add only 500 to 1,400 temporary construction jobs. The authors of the September report also said that much of the new employment stemming from Keystone would be outside the U.S.

Transcanada itself cast doubt on its employment forecast when a vice president for the company told CNN last fall that the 20,000 jobs Keystone would create were temporary and that the project would likely yield only “hundreds” of permanent positions.

Another reason for the discrepancy appears to stem from what that 20,000 figure really means. As Transcanada has conceded, its estimate counted up “job years” spent on the project, not jobs. In other words, the company was counting a single construction worker who worked for two years on Keystone as two jobs, lending fuel to critics who said advocates of the pipeline were overstating its benefits.

In the long term, the Keystone pipeline could cost jobs in the U.S., according to one Cornell University study.