President Obama Rejects Approval of Keystone Oil Pipeline

TOM HUDSON: The Obama administration today moved to block the
controversial Keystone XL pipeline. It would have brought oil from Canada
to the Gulf of Mexico here in America. Republicans called the decision a
job killer, while environmentalists applauded the protection of water
supplies along the pipeline route. Darren Gersh reports tonight from
Washington.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: The White House
blamed the decision to block the Keystone pipeline on what it called an
arbitrary deadline for approval forced by Congressional Republicans.

JAY CARNEY, WHITE HOUSE SPOKESMAN: The Republicans put in jeopardy a
process that should be immune from politics.

GERSH: Oil producers blasted the president for caving in to pressure
from environmentalists and Republican Congressional leaders promised to
keep pushing for the pipeline.

REP. JOHN BOEHNER, HOUSE SPEAKER: The American people are still
asking the question, where are the jobs? And here the president`s got an
opportunity to create 20,000 direct jobs and over 100,000 indirect jobs and
he says no.

GERSH: Most analysts expect the Keystone XL pipeline will ultimately
be built by shifting the route to avoid Nebraska`s sensitive Sand Hills
water supply. A new route could also make it easier to transport oil
produced in the Bakken formation in North Dakota down to the Gulf of
Mexico.

KEVIN KERR, PRESIDENT, KERR TRADING: It`s going to have to find
another route. I`m not sure where it will be diverted to or who will step
in or what might happen to facilitate changing this decision. But
ultimately, that oil will have to get to the U.S. and we need it and
somehow it`s going to get here, but this is absolutely a big hurdle to
overcome.

GERSH: Despite news the pipeline was in trouble, crude oil futures
prices ended the day down slightly. Traders were focused on the risk global
demand is weakening, though Keystone concerns aren`t going away.

KERR: It could really exacerbate some of the price moves that we`ve
seen lately. It`s yet to be seen what will actually occur, but you know
with the key pipelines being cut out of the picture, it`s going to have
some impact longer term.

GERSH: TransCanada says it will apply again for a permit to build
the pipeline, but analysts at Clearview Energy Partners (NYSE:EPL) say this
battle has already had one lasting impact on the oil industry. In the
future, companies planning to build a pipeline will have to factor in a
long and expensive political battle. Darren Gersh, NIGHTLY BUSINESS
REPORT, Washington.


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