Keystone rejected

(This post last updated at 6:57pm.)

(This post last updated at 6:57pm.)

So reports the Washington Post. With an asterisk.

The Obama administration will announce this afternoon it is rejecting a Canadian firm’s application for a permit to build and operate a massive oil pipeline across the U.S.-Canada border, according to sources who have been briefed on the matter. However the administration will allow TransCanada to reapply after it develops an alternate route through the sensitive habitat of Nebraska’s Sandhills.

The Prime Minister’s last comments on Keystone came Monday in his interview with the CBC.

I think what’s happened around the Keystone is a wakeup call, the degree to which we are dependent or possibly held hostage to decisions in the United States, and especially decisions that may be made for very bad political reasons. So I think that just … it puts an emphasis on the fact that we must perform our regulatory processes to get timely decisions on diversification of our markets.

Update 2:03pm. Maybe “rejected” is too simplistic a characterization. The New York Times has the project “on hold.”

The administration has until Feb. 21 to decide the fate of the 1,700-mile pipeline to carry heavy crude oil from formations in Alberta, Canada, to refineries on the Gulf Coast. Officials are expected to announce that they cannot meet that deadline and that they are looking for ways to complete a thorough environmental review before making a final decision on the project … The State Department is expected to say that routing, environmental and safety concerns raised by the project are too complex to be decided on that abbreviated timetable and is recommending that President Obama reject it for the time being.

Update 3:17pm. And here is the official statement from the U.S. State Department.

Today, the Department of State recommended to President Obama that the presidential permit for the proposed Keystone XL Pipeline be denied and, that at this time, the TransCanada Keystone XL Pipeline be determined not to serve the national interest. The President concurred with the Department’s recommendation, which was predicated on the fact that the Department does not have sufficient time to obtain the information necessary to assess whether the project, in its current state, is in the national interest.

Update 3:28pm. A note from the Prime Minister’s Office on Mr. Harper’s conversation with Mr. Obama.

Earlier this afternoon, Prime Minister Stephen Harper received a phone call from Barack Obama, President of the United States. President Obama informed the Prime Minister of his Administration’s decision to turn down TransCanada’s application to build and operate the Keystone XL pipeline.

The President explained that the decision was not a decision on the merits of the project and that it was without prejudice, meaning that TransCanada is free to re-apply. Prime Minister Harper expressed his profound disappointment with the news.  He indicated to President Obama that he hoped that this project would continue given the significant contribution it would make to jobs and economic growth both in Canada and the United States of America.

The Prime Minister reiterated to the President that Canada will continue to work to diversify its energy exports.

Update 3:35pm. Althia Raj had early reaction from the NDP’s Megan Leslie. Christopher Sands considers the political calculus. Brad Plumer considers the ramifications.

Update 3:51pm. A fact check from CNN on the number of jobs that would be created by a pipeline.

But TransCanada numbers count each job on a yearly basis. If the pipeline employs 10,000 people working for two years, that’s 20,000 jobs by the company’s count. The estimates also include jobs in Canada, where about a third of the $7 billion pipeline would be constructed. The U.S. State Department, which must green light the project, forecasts just 5,000 direct U.S. jobs over a two year construction period. Even according to TransCanada, the amount of permanent jobs created would be only in the hundreds.

Update 6:57pm. The full statement from Natural Resources Minister Joe Oliver.

“We are obviously disappointed with today’s announcement regarding the Keystone XL pipeline.

This project would create thousands upon thousands of jobs both in the US and Canada and would contribute to energy security in the US. We continue to believe this project is in the best interests of both countries.

Our Government respects the right of the United States to make its own decisions.

However, it is clear that the process is not yet over and we are hopeful that this project will be approved in the future based on its merits.

Canada and the United States enjoy the single most important energy relationship in the world. We will continue to work with the US to further strengthen energy security for both our nations.

Meanwhile, our Government is moving ahead on creating jobs and economic prosperity for all Canadians. The responsible development of the enormous resources provided by our oil sands is expected to create hundreds of thousands of jobs spread across the country, generating significant economic benefits.

We cannot understate the fact that these benefits fund critical services for Canadians, including health care and education. 99% of our oil exports currently flow to the United States. Today’s decision by the Obama Administration underlines the importance of diversifying and expanding our markets, including the growing Asian market, to help ensure the financial security of Canadians and families for decades to come.”