Obama notes concerns over 'dirty' Keystone oil extraction

U.S. President Barack Obama amplified the concerns of environmentalists about the Keystone XL oil pipeline on Friday and repeated his own reservations the project would have few benefits, but said he has not made a decision on the project.

Obama, explaining the debate over the pipeline to a group of students, described concerns about the "extraordinarily dirty" extraction methods for Canadian oilsands - a description the Canadian government has long argued is unfair.

"The reason that a lot of environmentalists are concerned about it is the way that you get the oil out in Canada is an extraordinarily dirty way of extracting oil, and obviously there are always risks in piping a lot of oil through Nebraska farmland and other parts of the country," Obama told students at the town hall event.

Green groups said the comments showed Obama is likely to decide against TransCanada Corp's project that has been pending for more than six years.

Jim Murphy, senior counsel for the National Wildlife Federation, said Obama's comments "are the strongest indication yet that points the needle to the president rejecting the pipeline."

Obama has downplayed the jobs the pipeline would create since late last year, and the relief it would give to U.S. drivers. On Friday, he reiterated the project will only create "about 300" permanent jobs and would mainly benefit Canada.

An energy policy analyst said Obama's comments are either a proxy for the way the president feels about the pipeline or an explanation of why its such a hard decision for him to make.

"If indeed he is criticizing the extraction process itself, it does seem a step more negative," said Kevin Book, an energy policy analyst at ClearView Energy Partners.

Obama, who has said the project should not be approved if it significantly impacts climate change, is expected to make a final decision in coming weeks or months.

"I haven't made a final determination on it, but what I've said is, 'we're not going to authorize a pipeline that benefits largely a foreign company if it can't be shown that it is safe and if it can't be shown that overall it would not contribute to climate change,'" Obama said on Friday.

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Keystone XL, Nebraska, TransCanada Corp, Canada, pipeline

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