House Speaker John Boehner criticizes the White House over its rejection of the Keystone oil pipeline project that many Republicans argue would have created thousands of jobs.
Updated at 5:45 p.m. ET
President Barack Obama on Wednesday rejected a Canadian company's plan to build a U.S.-spanning, 1,700-mile (2,700 kilometer) pipeline to carry oil across six U.S. states to Texas refineries, raising the stakes on a bitter election year fight with Republicans.
Though the project promises thousands of temporary jobs for the recovering U.S. economy, Obama said a February deadline set by Congress would not allow for a proper review of potential harm from the $7 billion Keystone XL project.
"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," Obama, a Democrat, said.
The plan proposed by Calgary-based TransCanada would carry oil from tar sands in western Canada to Texas.
Republicans assailed Obama's decision as a job-killer and said the fight was not over.
And the State Department said the decision was made "without prejudice," meaning TransCanada can submit a new application once a route through environmentally sensitive areas of Nebraska is established.
Russ Girling, TransCanada's president and chief executive officer, said the company plans to do exactly that. If approved, the pipeline could begin operation as soon as 2014, Girling said.
Republicans were not assuaged.
Newt Gingrich, campaigning for the Republican presidential nomination in South Carolina, called Obama's decision "stunningly stupid," adding: "What Obama has done is kill jobs, weaken American security and drive Canada into the arms of China out of just sheer stupidity."
Sen. John Hoeven, a Republican, has said of the Canadian crude oil: "It's going to go to China if we don't build it here."
But Alex Pourbaix, TransCanada Corp.'s president for energy and oil pipelines, said last week the company soon will have a new route through the state of Nebraska "that everyone agrees on."
For now, though, Mitt Romney, the Republican nomination front-runner, called Obama's decision "as shocking as it is revealing," adding that it "shows a president who once again has put politics ahead of sound policy."
The Republican leader of the House, Speaker John Boehner, said Obama was breaking his promise to create jobs.
"This is not the end of this fight," said Boehner. He called the pipeline good for the U.S. economy and a major job creator.
The pipeline proposal has forced the White House to make a politically risky choice between two important Democratic constituencies. Many labor unions back the project because of the prospects of new jobs in a fragile economy. Environmental groups fear the pipeline could lead to an oil spill disaster.
Some liberal donors threatened to cut off funds to Obama's re-election campaign to protest the project, which opponents say would transport "dirty oil" that requires huge amounts of energy to extract.
Obama said his decision was not based on the pipeline's merits but on what he called an arbitrary Feb. 21 deadline set by Republicans in Congress. They set the deadline as part of a tax bill that Obama signed into law in late December.
"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," Obama said.
Under his administration, domestic oil and natural gas production is up, while imports of foreign oil are down, Obama said.
"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," Obama said.
To underscore the point, Obama signaled that he would not oppose development of an oil pipeline from Oklahoma to refineries along the Gulf of Mexico. TransCanada already operates a pipeline from Canada to Oklahoma.
Refineries in Houston and along the Texas Gulf Coast can handle heavy crude such as that extracted from Canadian tar sands — the type of oil that would flow through the Keystone XL pipeline.
Canadian Prime Minister Stephen Harper said he was profoundly disappointed that Obama turned down the pipeline.
Sen. Kent Conrad, a Democrat, said he doesn't believe the Keystone XL is a dead project. He said the Obama administration did not have enough time to review the project, given the Republican-imposed timeline.
"I don't believe this is the end of the story," Conrad told The Associated Press. "My personal view is that it should be constructed. It's clear Canada is going to develop this resource, and I believe it is better for our country to have it go here rather than Asian markets."
Bill McKibben, an environmental activist who led opposition to the pipeline, praised Obama's decision to stand up to what he called a "naked political threat from Big Oil." Jack Gerard, the oil industry's top lobbyist, had said last week that Obama faced "huge political consequences" if he rejected the pipeline.
"It's not only the right thing, it's a very brave thing to do," McKibben said. "That's the Barack Obama I think people thought they were electing back in 2008."
Three oil refineries on US East Coast face possible shutdown
By Trent Novak
22 November 2011
Three
major oil refineries in the Philadelphia area are slated to close by
the end of next summer unless a buyer steps in to purchase them. If
these refineries shut down, 2,000 oil workers will immediately find
themselves unemployed, and the nearby communities are expected to lose
about 20,000 more jobs due to economic aftershocks.On September 6, Sunoco announced it planned to sell its refineries in Marcus Hook and South Philadelphia. Later in the month, ConocoPhillips followed suit by putting its Trainer refinery up for sale and having its workers set the facility to idling. Together, the three refineries are estimated to comprise roughly a third of the East Coast’s refining capacity.
In recent weeks, labor unio n officials have organized a public rally in Marcus Hook with the declared intention of demonstrating local support for oil workers, even as a group of prominent Pennsylvania politicians have requested a federal analysis on the possible consequences of the refineries’ closure.
Hundreds of workers, union members, and local residents turned out for the November 6 rally, marching several blocks from a United Steelworkers (USW) meeting hall to Market Square Memorial Park alongside the Delaware River. Members of the USW, United Auto Workers and other unions participated. Afterward, politicians and union officials gave brief speeches professing their support for American workers and the Marcus Hook oil workers in particular.
Although the rally was billed as an effort to mobilize workers and residents, the implicit agenda was to market the community to potential buyers as a willing and ready labor pool. An article in the Philadelphia Inquirer quotes David Miller, president of a USW local, announcing that Marcus Hook and the other refinery areas are more than willing to help any buyer who takes over the sites. “Anyone who’s looking to make money, c’mon down and we’ll all help,” he declared. “Buy all three and you can be the biggest, baddest dog on the block.” The mayor of Marcus Hook, James D. Schiliro, declared the purpose of the rally to be “coming together to show the buyers that we can make it work and we can make them money.”
Senator Bob Casey (Democrat) and Congressman Pat Meehan (Republican) were also present. Both men are included on the list of lawmakers seeking a US Energy Information Administration assessment on how the loss of the refineries would affect energy prices throughout the region.
While workers came out of concern over potential job losses, they were provided with no means of fighting. Instead, the rally was a platform for the two parties of big business and the nationalist orientation of the labor unions. One USW local president insisted that “keeping jobs in the US is an absolute priority,” while other speakers emphasized that the refinery closings are not a “partisan” issue, but a matter of “whoever we can work together with.”
The absurdity of a nationalistic approach and one that uncritically accepts the corporate control of the energy giants and banks becomes obvious the moment one examines the economic factors behind Sunoco and ConocoPhillips’s decision.
All three of the Philadelphia refineries are only equipped to process a lighter, sweeter variety of crude oil instead of the heavier, more sour kind used by most refining facilities. Lighter crude is more expensive, has to be shipped from a handful of countries, and makes up the vast majority of Sunoco’s crude oil purchases.
An article by a Reuters market analyst notes that, in July, Sunoco was getting most of its oil from Nigeria, Norway, and Azerbaijan, with access to Libya’s light crude hampered by NATO’s military intervention. Because its East Coast refineries have to import oil from overseas and lack the technical capability to process heavier varieties, Sunoco’s expenses on crude ranked among the highest of all energy companies. The author concludes that “Philadelphia and Marcus Hook are the two worst refineries to own in the United States” and predicts they will be converted into storage terminals for transporting natural gas and other materials from the Marcellus Shale. The cost involved in updating the refineries to process heavier crude would be prohibitively expensive, the author wrote, due to international market pressures facing North American and European companies.
Since the economic crisis began, the longstanding “peak” in crude oil prices has been replaced with a marked decline in US demand for refined petroleum products. Refineries across the nation are now confronted with the possibility that consumer demand will remain at a long-term low.
This is especially true of Sunoco, which has a refining and supply sector that has been unprofitable for 9 out of the past 11 quarters.
Sunoco CEO Lynn Elsenhans has accordingly pursued a determined policy of manufacturing divestitures. Sunoco has already sold off two refineries in the Midwest, closed another Pennsylvania refinery, and pulled out of metallurgical coke, home heating oil, and chemicals manufacturing. Elsenhans has stated that the company’s future lies in retail fuel, convenience store sales, and fuel transportation.
The potential closure of these three refineries and the economic devastation that will be visited on the towns that depend on them is just a single facet of the movements of international capital. There is no “all-American” alternative, especially when it comes to oil, a natural resource that has led the United States to pursue war throughout the Middle East and, most recently, in Libya. From the standpoint of the nationally based unions, “keeping jobs at home” means transforming the US into a platform for cheap labor, as has already happened in the auto industry, not uniting energy workers around the world to defend jobs for all.
Bruce, who has worked in both the Marcus Hook and trainer refineries for most of his life, said his situation is representative of most workers at the refinery. In many cases, workers have been there for 24-25 years. He also expressed his worries that education in the area would be gutted as local schools lose their tax base.
Nick, a union member at the Marcus Hook rally, remarked that even if the refineries are used to transport natural gas or for some other alternative, all of the estimates he has seen show that only about half of the labor force would be retained.
Nick went on to say, “large companies take the human element out of it” and “just leave without preparing the people or helping them retrain.”
This is precisely the problem with a social system based on the profit motive rather than genuine human need. The ruling class has no room for a “human element” in the present economic crisis because it has to scramble and fight for its own interests. Sunoco incurred a $17 million loss in refining and supply last quarter. From the perspective of the company and its executives, the livelihoods of thousands of people are insignificant in comparison.
If the right to good-paying and secure jobs, decent schools and neighborhoods is to take priority, the working class must fight for the nationalization of the oil monopolies under democratic control, as part of the socialist reorganization of economic life in the US and internationally.
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