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Climate Change, Not Keystone, Focus of President’s Address

President Obama devoted several minutes of his penultimate State of the Union address to climate change Tuesday night, giving only two brief nods to domestic oil and gas production and only a passing reference to Congress working on a bill authorizing construction of the Keystone XL oil pipeline, despite his threat of a veto.

"We are as free from the grip of foreign oil as we've been in almost 30 years," Obama said shortly into his nearly hour-long speech. "We believed we could reduce our dependence on foreign oil and protect our planet. Today, America is No. 1 in oil and gas..."

The president did not repeat a threat issued earlier this month to veto a Keystone XL bill (see Shale DailyJan. 6). However, he promised to thwart any effort by Congress to enact sanctions against Iran, roll back his executive order on immigration, or repeal legislation governing health care and Wall Street reform.

A bill being debated in the Senate, S-1, would authorize TransCanada Corp. to construct and operate the Keystone XL pipeline. It would run from Alberta to the U.S. Gulf Coast (see Shale DailyMay 7, 2012). The southern segment is completed (see Shale Daily, Nov. 13, 2013). The pipeline would transport up to 830,000 b/d to U.S. refineries, including 100,000 b/d from the Bakken Shale.

Lawmakers on both sides of the political divide stood when Obama said "21st Century businesses need 21st Century infrastructure -- modern ports and stronger bridges, faster trains and the fastest Internet.

"Democrats and Republicans used to agree on this. So let's set our sights higher than a single oil pipeline. Let's pass a bipartisan infrastructure plan that could create more than 30 times as many jobs per year and make this country stronger for decades to come. Let's do it. Let's get it done."

On climate change, the president said "no challenge poses a greater threat to future generations," adding that 2014 was the planet's warmest year on record, and that 14 of the 15 warmest years on record have been in this century. He criticized the camp of climate change deniers as being out of touch with reality.

"I've heard some folks try to dodge the evidence by saying they're not scientists, that we don't have enough information to act," Obama said. "The best scientists in the world are all telling us that our activities are changing the climate, and if we don't act forcefully we'll continue to see rising oceans; longer, hotter heat waves; dangerous droughts and floods, and massive disruptions that can trigger greater migration and conflict and hunger around the globe.

"Over the past six years, we've done more than ever to combat climate change -- from the way we produce energy to the way we use it. That's why we've set aside more public lands and waters than any administration in history. And that's why I will not let this Congress endanger the health of our children by turning back the clock on our efforts."

The president added that last November's historic agreement with China over climate change -- where Beijing pledged to stop its greenhouse gas emissions from growing by 2030 -- would lead to other nations "stepping up and offering hope that this year the world will finally reach an agreement to protect the one planet we've got."

Republican Response

For the official Republican response, Sen. Joni Ernst (R-IA) used the political fight over Keystone XL as the opening salvo against Obama.

"We're working hard to pass the kind of serious job creation ideas you deserve; one you've probably heard about is the Keystone jobs bill," Ernst said. "President Obama has been delaying this bipartisan infrastructure project for years, even though many members of his party, unions and a strong majority of Americans support it. The president's own State Department has said Keystone's construction could support thousands of jobs and pump billions into our economy, and do it with minimal environmental impact.

"We've worked with Democrats to pass this bill through the House, we're doing the same now in the Senate. President Obama will soon have a decision to make -- will he sign the bill, or block good American jobs?"

Separately, Sen. Jim Inhofe (R-OK), who is chairman of the Senate Environment and Public Works Committee, blasted the president and the U.S. Environmental Protection Agency (EPA), which is expected to issue draft rules for reducing methane emissions this summer (see Daily GPIJan. 14).

"We are experiencing an energy revolution in spite of the president's policies that are intended to stifle the development of our domestic resources," Inhofe said. "The president's war on fossil fuels and nuclear energy is most evident in his unbridled mandates being issued by the EPA."

Industry Response

"We applaud the president for acknowledging the important role natural gas plays in America's economy," said Don Santa, CEO of the Interstate Natural Gas Association of America (INGAA). "Natural gas is driving the resurgence in U.S. manufacturing, creating high-paying American jobs, generating revenues, reducing emissions and lowering consumer energy prices.

"We must continue to expand America's energy infrastructure to ensure that this success story continues, including by investigating ways to streamline pipeline permitting and get new pipelines built, while continuing to protect landowners and the environment."

America's Natural Gas Alliance (ANGA) CEO Marty Durbin concurred. "We welcome President Obama's continued recognition of the benefits that natural gas and our nation's energy renaissance more broadly, are providing for all Americans," he said. "It is clear that the president understands the role natural gas plays in meeting our nation's economic and environmental needs…

"The president himself has singled out natural gas as a critical component of his long-term economic and climate strategies, and increased use of natural gas use throughout the economy has been critical to reducing greenhouse gas emissions to near 20-year lows and dramatically reducing air pollution. It also has created many thousands of American jobs and saved consumers substantial money on energy bills."

The head of the American Petroleum Institute (API) was less conciliatory.

CEO Jack Gerard said Obama's speech "did not even begin to tell the whole story. America is now a global energy superpower thanks to our oil and natural gas renaissance, but most of this development has occurred in spite of the federal government. Development on the federal lands under control of the administration has actually gone down consistently, and revenues from leasing also fell by over $1 billion in the last year…

"The private sector could invest more than $1 trillion in oil and gas infrastructure here in the U.S. by 2025. But, as we've seen with the political delays over the Keystone XL pipeline, our government is often the biggest obstacle to private investment in our economy. The government is standing in the way of jobs, economic growth, and America's competitiveness."

Environmental Groups Respond

Not surprisingly, environmental groups seized on the president’s comments about climate change. Some interpreted them to mean he remains opposed to the Keystone XL pipeline.

“President Obama hit the nail on the head by urging us to focus on expanding jobs in our nation's infrastructure -- and stop looking to the Keystone XL pipeline, a dirty tar sands project that would sustain 35 permanent jobs,” said Natural Resources Defense Council President Rhea Suh.

May Boeve, executive director of the group 350.org, said Obama’s speech put “wind in the sails” of those opposed to Keystone XL. “He said we need to think beyond a single pipeline, and made a strong case for developing sustainable, clean energy sources like wind and solar. The president is clearly beginning to think about his climate legacy, and he understands that it depends on rejecting Keystone XL.”

Sierra Club Executive Director Michael Brune added that “when it comes to the climate crisis, the president knows the stakes...he underscored the urgency of the problem with his commitment to climate action for our children’s future. To meet the greatest challenge of our generation, we can and we must end our dependence not just on foreign oil, but all fossil fuels.  We can indeed set our sights higher than a single oil pipeline.”

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