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Obama Downplays Keystone's Benefits Ahead of Pipeline Decision

The Sierra Club, a national environmental group, is actively opposing the project, asserting in a statement that tar sands oil “is the most toxic fossil fuel on the planet that leaves in its wake scarred landscapes and a web of pipelines and polluting refineries all while delaying our transition to a clean energy economy. It is an oil disaster that we can still stop.”

Ultimately the decision is left to Obama. The president has already rejected the project once, in January 2012, when he was faced with a congressionally mandated deadline to decide, noting at the time that additional assessment was required. TransCanada reapplied after routing the pipeline around the Sand Hills.

Now the White House is openly questioning TransCanada’s claim that the pipeline will create as many as 13,000 construction jobs -- 6,500 a year over two years. The president, in his interview with the NYT, placed the number closer to 2,000 construction jobs, although he didn’t reveal how he arrived at that number.

The State Department, in a draft report issued in March, placed the anticipated number of construction jobs at 3,900 per year. Including direct, indirect, and induced effects, Foggy Bottom acknowledged the project could potentially support 42,100 average annual jobs over two years.

The report further found that the project could potentially translate into approximately $2.05 billion in earnings. Direct expenditures such as construction and material costs would total about $3.3 billion. Short-term revenues from sources such as sales and use taxes would total approximately $65 million in states that levy such a tax.

“America's Building Trade Unions were disappointed to see that the president chose to minimize the importance of jobs for construction workers and to use employment figures promulgated by special interests and activist billionaires rather than his own Department of State's findings that the proposed Keystone xl pipeline would support approximately 42,100 average annual jobs across the United States over a one-to-two year construction period,” said

The draft review also said the pipeline would account for only about 35 permanent new jobs after construction is completed. Obama, in the interview with the Times, placed that number at between 50 and 100, adding that it would represent only “a blip relative to the need.”

In another report, the Department of Energy in June 2011 dispelled claims that the oil traveling through the pipeline was destined for foreign markets and that it might actually lead to an increase in pump prices. DOE found that unless there exists a surplus of heavy oil on the Gulf Coast “there would be no economic incentive to ship Canadian oil sands to Asia.” The Gulf refineries rely on declining supplies of Mexican and Venezuelan heavy crudes and therefore would be “natural customers for increased supplies” like that coming from Canada.

“Gasoline prices in all markets served by (East and Gulf Coast) refineries would be lower, including the Midwest,” the report said.

Hoeven noted that the president appears to be considering placing additional requirements on the project in exchange for his approval, noting during the Times interview that he believes Canada could be “doing more to mitigate carbon release.”

“So here we are, after 5 years -- after 5 years of delay -- the president is talking about adding new requirements to the project,” Hoeven said. “He is talking about adding those requirements in another country -- our closest friend and ally, Canada -- or I guess he is essentially saying he would turn down the project, a project that actually reduces greenhouse gas because there is less greenhouse gas if we move that oil by pipeline than if it is moved by truck, by train, or by tanker.”