President Barack Obama denied a permit for the controversial Keystone XL oil sands pipeline Jan. 18, saying the deadline imposed by Congress did not leave sufficient time to conduct the necessary review. "The rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment," Obama said in a statement. Late last year, Republicans attached to an unrelated short-term payroll tax cut extension a provision that compelled the White House to make a decision on the pipeline within 60 days.

But Obama emphasized: "This 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. 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."

Obama said that under his administration, domestic oil and natural gas production are up, while imports of foreign oil are down. "In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security—including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico—even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas," the President said. The proposed Keystone XL line would follow the Cushing-to-Houston route Obama described, after crossing the Great Plains on its way down from Canada.

The State Department, which is tasked with issuing the permit for the trans-national project, said "the Department's denial of the permit application does not preclude any subsequent permit application or applications for similar projects." Pipeline developer TransCanada Corporation immediately announced that it would submit a new permit application.

Pipeline supporters, however, were not appeased. "This political decision offers hard evidence that creating jobs is not a high priority for this administration," US Chamber of Commerce president Thomas 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."

Environmentalists, of course, applauded. "President Obama put the health and safety of the American people and our air, lands and water -- our national interest -- above the interests of the oil industry," Frances Beinecke, president of the Natural Resources Defense Council, said in a statement. (ENS, CNN Money, Jan. 18)

See our last post on the global struggle for control of oil.