The State Department will allow for a 45-day comment period. | M.Scott Mahaskey/POLITICO W.H. allies slam Keystone report

The State Department’s long-awaited environmental report on the Keystone XL pipeline leaves President Barack Obama with no real scientific reason to reject the nation’s most fiercely debated energy project.

The sprawling 2,000-page report, released late Friday afternoon, doesn’t issue a clear yea or nay on a sprawling section of pipeline that would traverse from western Canada to Oklahoma. But the report’s key takeaways — including a conclusion that the project would have “no significant impacts to most resources along the proposed Project route” — Obama may have been hemmed in by his own State Department experts.


Environmentalists were left sputtering Friday while pro-pipeline forces in Congress and industry insisted that this should leave no doubt that the pipeline can be built safely and provide for jobs and a fresh source of North American energy.

( PHOTOS: Keystone XL protest)

“Today’s report again makes clear there is no reason for this critical pipeline to be blocked one more day,” House Speaker John Boehner said in a statement. “After four years of needless delays, it is time for President Obama to stand up for middle-class jobs and energy security and approve the Keystone pipeline.”

The report also counters warnings from environmentalists that the pipeline’s construction would spur a huge increase in production from western Canada’s tar sands, believed to be one of the biggest reserves of crude oil outside Saudi Arabia — unleashing torrents of greenhouse gases into the atmosphere.

Without addressing those emissions overtly, the State Department suggests the issue may be moot because Canada will tap into its lucrative oil sands “with or without the proposed project.” It adds that “approval or denial of the proposed project is unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast area.”

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The report came about a year-and-a-half after the department issued a “final” report in August 2011 on Keystone that said the pipeline would cause minimal environmental impact. After massive White House sit-ins by anti-Keystone protesters followed, leading to arrests of more than 1,200 people, the department announced it would have to take a second look at the pipeline’s impact on sensitive water resources in Nebraska — kicking the issue past the 2012 election.

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The pipeline became a durable campaign issue anyway for Republicans and oil industry groups. Mitt Romney repeatedly promised that he would approve Keystone on “Day One” of his administration.

The Sierra Club, one of many environmental groups hoping for a clear thumbs-down, said it was “outraged” by Friday’s outcome .

“We’re mystified as to how the State Department can acknowledge the negative effects of the Earth’s dirtiest oil on our climate, but at the same time claim that the proposed pipeline will ‘not likely result in significant adverse environmental effects,” said Sierra Club Executive Director Michael Brune, one of dozens of activists who were arrested in an anti-Keystone protest last month after tying himself to the White House gate. “Whether this failure was willful or accidental, this report is nothing short of malpractice.”

Brune later told reporters, “You know the news is bad when it’s buried at 4 p.m. on a Friday afternoon.” He said the State Department’s report will make it tougher for the U.S. to be a global leader on climate change.

Greenpeace Executive Director Phil Radford warned that “letting corporations get rich off of environmental devastation will make Obama’s climate rhetoric look like the worst kind of greenwashing.”

Climate activist Bill McKibben, organizer of the mass White House sit-ins in 2011 and last month’s Keystone protests, called the report “Groundhog Day — we're hearing the same rehashed arguments from the State [Department] about why a great threat to the climate is not a threat at all.”

“Mother Nature filed her comments last year — the hottest year in American history; the top climate scientists in the U.S. have already chimed in,” McKibben said.

Senate Energy and Natural Resources Chairman Ron Wyden (D-Ore.) also faulted the study, saying it “falls short on a fundamental question: What is the impact on American consumers?”

“The State Department needs to explain how it is in America’s national and economic interests to facilitate Keystone XL’s completion, especially if the pipeline is simply a conduit for oil and refined products to go elsewhere that makes the United States less energy secure and drives domestic gas prices higher,” Wyden said.

Meanwhile, supporters of the project — who say it holds the promise of North American energy independence — said Obama has run out of excuses for delaying approval.

“After nearly five years of review and a favorable supplemental study, the president needs to approve the Keystone XL pipeline,” said Sen. John Hoeven (R-N.D.), who has joined Sen. Max Baucus (D-Mont.) in pressing for the president to approve the project.

“We’re going to clearly have to keep the push on,” Hoeven told POLITICO. “The problem of the report is that it doesn’t set a timeline.”

“No matter how many times KXL is reviewed, the result is the same: no significant environmental impact,” American Petroleum Institute Executive Vice President Marty Durbin said.

Consumer Energy Alliance Executive Vice President Michael Whatley said the pipeline’s critics “have tried to convince the public that moving forward with the pipeline would sacrifice our environment to the benefit of our economy. The draft SEIS from the State Department clearly refutes this false choice.”

And Louisiana Republican Sen. David Vitter, the ranking member on the energy panel, dismissed the report as “another excuse in the long line of delays in the Keystone XL pipeline.” He said, “Hurdles to permit Keystone XL have all been cleared, some of them multiple times, but the administration continues to put up new ones.”

Both supporters and opponents will have to wait a while for a final ruling.

The State Department will allow for a 45-day comment period and will hold a public meeting in Nebraska probably toward the middle of the comment period, Assistant Secretary Kerri-Ann Jones said. From there, State will make any final changes to the draft if necessary, release a final document, then receive feedback from other federal agencies while it determines whether the project would be in the national interest.

That could easily push the timeline until summer. Secretary of State John Kerry would ultimately make a recommendation to Obama, who makes the final decision.

Jones said the department was not endorsing or opposing the pipeline.

“This paper does not come out one way or the other and make a decision about what should happen with this project,” she said, adding: “We want to make sure we serve the best interests of our country, so we are really taking a very thorough look.”

The report said the pipeline’s construction would support 42,100 indirect jobs and 3,900 direct jobs during the one- to two-year construction period, which would bring in wages of about $2.05 billion, as well as another $3.3 billion in other spending. But once up and running, the operation of the pipeline would only support 35 permanent and 15 temporary jobs, mostly for inspections, maintenance and repairs.

“Based on this estimate, routine operation of the proposed pipeline would have negligible socioeconomic impacts,” the report said.

After Friday’s setback, the pipeline’s opponents were left with one major option: appealing to Obama to live up to his climate promises.

“We don’t think that there’s any sign that the White House has actually put its fingerprint on this analysis whatsoever,” the Sierra Club’s Brune told reporters. He added, “We do believe that the president is sincere in his commitment to fight climate change. We think this is an excellent opportunity for the president to demonstrate that commitment.”

This article first appeared on POLITICO Pro at 6:13 p.m. on March 1, 2013.