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#TBT: President Busted on False Keystone Claims

Nov 20, 2014

Last summer fact checkers caught President Obama attempting to belittle the importance of the Keystone XL pipeline, busting him for using false and deflated jobs numbers. But it appears he didn’t learn his lesson. Yet again, the president is being called out for skewing the facts to fit his narrative so he can avoid making a decision on the project. The Washington Post’s fact checker today gave President Obama "Three Pinocchios" for his recent comments suggesting that most of the North American oil transported by the Keystone XL pipeline would be exported overseas. The Post pointed to the findings from the president’s own State Department to undercut his claims. Perhaps if the president could get his facts straight he would realize Keystone XL is clearly in the national interest and finally approve the landmark jobs and energy project. 

November 20, 2014

Fact Checker: Obama’s claim that Keystone XL crude would go ‘everywhere else’ but the United States

…Twice during his recent overseas trip, President Obama asserted that the proposed Keystone XL pipeline was designed to take Canadian crude oil to the world markets. The implication of the president’s words is that the United States would be simply a conveyor belt for the oil.

The pipeline would allow the Canadians "to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else," the president said in Burma. The question he faced, he said in Australia, is whether "we should approve a pipeline shipping Canadian oil to world markets, not to the United States." Is this really the case?

The Facts

First of all, the president leaves out a very important step. The crude oil would travel to the Gulf Coast, where it would be refined into products such as motor gasoline and diesel fuel (known as a distillate fuel in the trade). As our colleague Steven Mufson reported more than two years ago, the refineries on the Gulf Coast are "eagerly waiting" for the Canadian crude, since there isn’t enough oil in the area anymore to feed the refineries. …

Indeed, the State Department’s final environmental impact statement on the Keystone XL project specifically disputed claims that the oil "would pass through the United States and be loaded onto vessels for ultimate sale in markets such as Asia," saying it was not economically justified. The State Department noted that the traditional sources of crude for the Gulf Coast, such as Mexico and Venezuela, are declining, and so refineries would have "significant incentive to obtain heavy crude from the oil sands."

So then the question turns on what happens to that oil after it leaves the refinery. Oil is a global commodity, of course, and where it travels often depends on market conditions. In Obama’s telling, however, the refined Canadian oil goes "everywhere else" and "not to the United States."

But that’s not right either, according to the State Department report. U.S. exports are not affected by various pipeline scenarios but instead by market conditions, such as "domestic demand versus domestic refining capacity, the cost of natural gas, and refining capacity abroad, including in foreign markets currently importing U.S. refined products such as Mexico, Brazil, Chile, and Europe," the report said. The demand for exports, in other words, is completely unrelated to building the Keystone XL pipeline. …

The Pinocchio Test

The president seriously overstates the percentage of Canadian crude that might be exported if the Keystone XL pipeline is built. He suggests all of it would be exported, without mentioning that it first would stop on the Gulf Coast to be refined into products. On top of that, current trends suggest that about one-third of that refined product would be exported. That is not insubstantial, but it is certainly much smaller than 100 percent.


All of this is laid out in the extensive report issued by the State Department earlier this year. The president might want to study it before he addresses the Keystone question again. In the meantime, he earns Three Pinocchios. We nearly made it Four Pinocchios, but it is correct that at least some of the product would be exported, based on current market conditions.

Three Pinocchios


Read the full fact check online here