Pipeline Rejection Angers Manufacturing Groups

Jan. 18, 2012
Critics of decision say 20,000 jobs at risk.

U.S. manufacturing groups ripped President Obama's decision Jan. 18 to reject a construction permit for the Keystone XL pipeline as a major setback to the nation's energy security.

"The decision to say no to a project that would create 20,000 manufacturing and construction jobs - with an additional 118,000 indirect jobs -- defies logic when the U.S. is suffering from high unemployment and a struggling economy," said National Association of Manufacturers President Jay Timmons in a prepared statement. "For America's future, it's always better to choose sound policy over politics. Instead, the administration followed the political winds and rejected a clear way to create jobs."

Obama issued a statement saying Congressional Republicans rushed a Feb. 21 deadline to approve the project before a full assessment of the pipeline's impact was conducted.

"The announcement is 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," Obama said in a statement. "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."

But NAM says the administration has exhaustively reviewed the environmental impact of the pipeline for more than three years and concluded it poses no significant risks.

"The president knows this and manufacturers are deeply disappointed that he has chosen to ignore this fact," NAM said.

The American Petroleum Institute characterized Obama's decision as a nod to extremist groups.

This is not leadership," said Jack Gerard, API president and CEO, in a statement. "It's a genuflection to extreme elements who somehow believe America will be stronger turning its back on secure supplies of oil the President's own energy department says will be needed for decades to come."

Gerard also noted that the project has undergone more than three years of multiple-agency reviews.

"He is blocking a multibillion-dollar oil infrastructure project stretching across five states the day after his own Jobs Council has suggested that such projects are critical to helping our economy improve," Gerard said. "This is all almost too hard to believe. It makes you really question how serious the president is about job creation. We have to ask, Mr. President, what are you thinking?"

Gerard said he's still hopeful there's a way Congress can work through bipartisan leadership to move the project forward.

The nearly 1 million barrels of oil per day the pipeline would bring to the United States would significantly reduce the nation's energy dependence on volatile nations, said the Industrial Energy Consumers of America, which represents many energy-intensive manufacturers.

"The president's decision today will threaten the loss of these potential new jobs and leave us dependent on foreign oil supply," the group said. "Indecision does not solve our country's unemployment problem."

See also:

Obama to Reject Keystone Pipeline

Canadian Oil May Go to China Without Keystone Pipeline

Republican Leaders Tie Keystone XL Approval to Payroll-Tax Bill

State Department's Handling of Keystone XL Pipeline Probed

About the Author

Jonathan Katz | Former Managing Editor

Former Managing Editor Jon Katz covered leadership and strategy, tackling subjects such as lean manufacturing leadership, strategy development and deployment, corporate culture, corporate social responsibility, and growth strategies. As well, he provided news and analysis of successful companies in the chemical and energy industries, including oil and gas, renewable and alternative.

Jon worked as an intern for IndustryWeek before serving as a reporter for The Morning Journal and then as an associate editor for Penton Media’s Supply Chain Technology News.

Jon received his bachelor’s degree in Journalism from Kent State University and is a die-hard Cleveland sports fan.

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