Energy

In early January, US President Barack Obama said he’d veto legislation to allow for the construction of the Keystone XL pipeline. On Tuesday, he kept his promise to reject the bill.

In early January, US President Barack Obama said he’d veto legislation to allow for the construction of the Keystone XL pipeline. On Tuesday, he kept his promise to reject the bill.

According to Politico, the president rejected the bill just hours after the legislation was delivered to his desk. That was the third veto of Obama’s presidency, compared to 12 vetoes from George W. Bush and 37 from Clinton, the Washington Post notes.

“Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest,” Obama said in a statement.

Though the move has of course garnered praise from those opposed to the project, others aren’t so pleased. House Speaker John Boehner called the rejection “a national embarrassment,” while Senate Energy and Natural Resources Chairwoman Lisa Murkowski said that the president has lost sight of an opportunity to create jobs and improve energy independence for North America.

For his part, Canadian Natural Resources Minister Greg Rickford doesn’t seem to be giving up on TransCanada’s (TSX:TRP) $8-billion pipeline. “It is not a question of if this project will be approved; it is a matter of when,” he said in a statement. “This is not a debate between Canada and the U.S.; it’s a debate between the President and the American people, who are supportive of the project.”

Republicans still have an opportunity to bypass Obama through an override vote that must be held by March 3. That option would require rounding up a few more votes in both the House and the Senate — a task that news outlets don’t seem to think the GOP will be up to. Politico notes that the time frame gives a “small window” to secure additional votes, while the Globe and Mail states that “chances of finding another four votes [in the senate] seem slim.”

Going back even further, some analysts have long been skeptical that the project will go through — Marin Katusa, chief energy investment strategist at Casey Research, reiterated his prediction that Obama would veto the project last month. “The window of opportunity has passed at $45 oil. As I said three years ago, it’s not going to happen this cycle and it’s not going to happen under Obama,” he said.

That said, Obama hasn’t necessarily slammed the door on the pipeline yet. The Globe and Mail quotes White House spokesperson Josh Earnest as saying that it’s still possible for the pipeline to gain Obama’s approval. He said that “[t]he president will keep an open mind.”

“The reason the president will veto this bill is because it circumvents a longstanding approval process [used to evaluate such projects],” Earnest went on to say. “[The veto] does not represent his position on the pipeline itself.”

Obama has said he’ll approve the pipeline as long as the project doesn’t cause a significant increase in carbon emissions, the Toronto Star notes. However, the Star also points out that Obama has made negative comments regarding the pipeline in recent months.

To be sure, energy investors will be keeping an eye out for further developments in the process.

 

Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 

Related reading:

Nebraska Court Decision and Congress Vote Set Face Off with Obama on Keystone

Obama Says He’d Veto Keystone XL

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