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Obama Makes It Official; Keystone XL Is a No-Go

President Barack Obama formally announced his rejection of the Keystone XL oil pipeline, setting up a new confrontation with Republicans who contend the project would create as many as 20,000 jobs.

In a statement this afternoon, Obama blamed Congressional Republicans for setting a “rushed and arbitrary deadline” which prevented the State Department from making a “full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment.”

Obama continued, “As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree.”

Obama was careful to note that his decision was “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.”

The announcement came after news leaked early today that Obama was set to disallow the pipeline at this time.

In reaction to those media reports, Brendan Buck, spokesman for Speaker John Boehner (R-Ohio), promised that the fight to build the pipeline from Canada to the Gulf Coast would continue.

“President Obama is about to destroy tens of thousands of American jobs and sell American energy security to the Chinese,” Buck said. “The president won’t stand up to his political base even to create American jobs. This is not the end of this fight.”

The payroll tax cut extension bill the president signed last month gave Obama the authority to reject the pipeline within 60 days if he determined it was not in the national interest. But the administration had repeatedly contended that there was not enough time to review the project and make a determination in that time period, given that a route through Nebraska has not yet been selected. The original Nebraska route was scrapped last year after concerns were raised in that state over the potential damage to groundwater supplies should a spill occur.

The National Republican Congressional Committee is targeting House Democrats over the issue, accusing them of “buckling under pressure from their radical base and preparing to send these thousands of jobs from the Keystone XL pipeline project overseas to countries like China instead.”

Democrats and the president have dueling constituencies on opposite sides of the issue. Environmentalists oppose the pipeline because the oil comes from Canadian tar sands and because the pipeline might be built through environmentally sensitive areas of the U.S., but unions back the program because it could create jobs.

Sen. Mike Johanns (R-Neb.) took the White House to task for pointing to the lack of a route in Nebraska for not moving forward now with the project.

“The president apparently lacks faith in Nebraska’s ability to select a route,” Johanns said. “By arguing that the Nebraska route could force them to deny the permit, he’s implying Nebraska can’t get it right. … To suggest a few dozen miles of the route in Nebraska — which will be identified by the governor, consistent with the law — affects the overall public interest for more than 1,600 miles of pipeline is laughable and reeks of political gamesmanship.”

The business community also blasted the administration’s decision.

“This political decision offers hard evidence that creating jobs is not a high priority for this administration,” U.S. Chamber of Commerce President and CEO Tom Donohue said in a statement. “The president’s decision sends a strong message to the business community and to investors: keep your money on the sidelines, America is not open for business.”

Business Roundtable President John Engler said it was a good sign that the State Department would allow TransCanada to reapply for pipeline permit.

“In fact, I am confident the Keystone pipeline will be approved in the future because it is in the national interest,” he said in a statement. “There will always be people who oppose any permitting of projects like the Keystone pipeline, but our government will have to say yes to these kinds of projects if our nation is going to grow, prosper and compete.”

Environmental groups expressed cautious optimism about the news reports.

“If reports that the Obama administration is rejecting the Keystone XL pipeline are accurate, this will be an iconic victory that demonstrates the growing strength of the climate movement,” said Damon Moglen, climate and energy director for Friends of the Earth. “The Keystone XL fight was David versus Goliath — no one thought we could win. A victory would show that sustained grass-roots pressure aimed at holding the president accountable to the public interest proved more powerful than all the lobbyists the oil industry could muster.”

Kate Ackley contributed to this report.

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