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Energy Week 2012 / ENERGY

ExxonMobil CEO: Politics Swamped Keystone

photo of Amy Harder
March 9, 2012

HOUSTON—The top executive of one of the world’s biggest energy companies, oil giant ExxonMobil, slammed President Obama’s decision to deny a permit for the Keystone XL pipeline as catering to his political base.

“The unfortunate decision to halt progress on the pipeline was a project of political calculus in Washington,” ExxonMobil Chairman and CEO Rex Tillerson told hundreds of energy executives at the IHS Cambridge Energy Research Associates annual conference on Friday. He didn’t mention Obama by name, but his target was clear.

Facing a GOP-forced, 60-day deadline to decide on the pipeline, Obama denied a permit for the project in January, arguing there was not enough time to adequately assess the possible environmental impacts. The congressional deadline was imposed after Obama, facing intense pressure from environmentalists in November, announced he would delay the review process until at least the beginning of 2013 so studies could be conducted to find a new route avoiding an ecologically sensitive area in Nebraska.

 

Former New Mexico Gov. Bill Richardson, a Democratic presidential candidate in 2008, defended Obama’s decision to deny the permit when faced with the Republicans’ deadline.

“I think Republicans were playing politics and jamming the president to make a decision,” Richardson, a former Energy secretary, told reporters at the conference. When asked whether he thought politics influenced Obama’s decision in November to delay the pipeline approval process until at least next year, Richardson responded: “I don’t know.”

Tillerson's and Richardson’s comments came less than 12 hours after the Senate narrowly defeated a measure, sponsored by Senate Foreign Relations ranking member Richard Lugar, R-Ind., and Sen. John Hoeven, R-N.D., that would have mandated approval of the pipeline. The final vote was 56-42; it needed 60 votes to pass.

Tillerson referenced a State Department inspector general report that found the administration did not improperly review the project’s environmental impact, a charge made by some environmental groups and reported in the media.

“In the end it was also a disservice to the public employees who are charged with overseeing this project who have met their obligations,” Tillerson said. “In such cases government has a responsibility to focus on the national interest when setting energy policy.”

TransCanada, the Canadian company seeking to build the 1,700-mile Keystone XL pipeline from Alberta's oil sands to Gulf Coast refineries, wasn’t the only company reeling from the delay in the controversial project.

Siemens, a multinational manufacturing and technology company, has been planning on providing products to help build the pipeline and has already provided some equipment for the now-stalled pipeline.

“We sold some compressors and motors and other products manufactured mostly in our Norwood, Ohio, facility,” Eric Spiegel, president and CEO of Siemens USA, told National Journal on the sidelines of the Houston conference on Thursday.

Spiegel said his company was working with TransCanada on the safety aspects of the pipeline, one of the chief concerns among environmentalists and residents of the six states the pipeline would traverse.

“I know there are some environmental concerns, but one of the things we’re doing is working with TransCanada to make sure this is the most environmentally sound project that it could possibly be,” Spiegel said.

TransCanada is moving forward on building the southern part of the pipeline (484 miles worth) from Oklahoma to the Gulf and has said it will reapply for a permit for the rest of the project within weeks.

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