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Keystone Decision Looms Large for Obama Keystone Decision Looms Large for Obama

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Policy

ENERGY

Keystone Decision Looms Large for Obama

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The Keystone XL pipeline protest seemingly overlapped with the Occupy Wall Street protest at the White House on Nov. 6, 2011.(Richard A. Bloom)

The Keystone XL pipeline was a lightning rod in President Obama’s reelection campaign. So now that the campaign is over, what will be the fate of the transnational oil pipeline that became a political symbol, thrusting Obama into the heart of an uncomfortable fight over jobs versus the environment?  

Obama’s final decision could come as soon as January. Environmental groups are launching an all-out campaign to pressure him to kill the project once and for all. That would draw an immediate firestorm of criticism from the right and from many in his own party, particularly labor groups, who say the project will create much-needed construction jobs as well as a conduit for North American oil to get into the global market. No matter what the decision, “somebody’s going to be mad,” said Mark Mellman, a Democratic pollster.

 

“My strong guess is that he’ll make a decision based on the merits as he sees them and let the chips fall where they may,” Mellman said. “You’re not going to please all the people all the time, but that’s what you can do as a second-term president.”

Right now, the project is under a battery of state and local environmental reviews, which are expected to be completed by the end of the year. A permit request will then go back to the State Department, which will have to answer the simple but loaded question: Is the pipeline in the national interest? Because of the high-profile and controversial nature of the project, it’s likely that Obama himself will make the final call.

“The administration never resolved the fundamental question of whether Keystone is in the national interest,” said Michael Levi, director of the Program on Energy Security and Climate Change at the Council on Foreign Relations. “That’s where the real question remains, and that’s where there’s the most ambiguity — the basic question about how you balance oil production and trade commitments against climate change.”

 

Carlos Pascual, the State Department’s Special Envoy for International Energy Affairs, told National Journal, “The critical issues that we’re really looking at are, what is in the national interest of the U.S. from an environmental, economic, national-security perspective to ensure that we’re making the best possible uses of resources in North America and we’re doing that in a way that’s consistent with our long-term interests.… The fundamental goal is to ensure that our nation is secure, that we have economic prosperity, and that we’re doing this in environmentally sustainable ways.”

There’s also the possibility that the pipeline could continue to play a role as a political tool. Obama has said that in a second term, he hopes to finally move serious legislation to fight global warming. Approval of the Keystone XL could serve as one piece of a grand bargain with Republicans on climate change and energy.

Keystone blasted from the back burner to the headlines in the summer of 2011, as the State Department neared approval of the $7 billion, 1,700-mile pipeline that would bring oil from the Alberta tar sands of Canada to refineries on the Gulf Coast.

 

Thousands of demonstrators showed up in Washington to protest the project. Packed four and five deep, they wrapped a giant prop pipeline around the White House in hopes of sending the message to Obama that green-lighting the project would freeze their support for him in 2012.

The reason: building the pipeline would provide a market for one of the dirtiest fuel sources in the world, since production of tar-sands oil creates 30 to 70 percent more carbon pollution than conventional oil drilling. The protests worked: Obama put the project on ice until after the election, and in so doing, gave powerful ammunition to his opponents. Republicans and super PACs launched a stream of Keystone-themed attacks against the president.

But Obama, as he so often does on energy policy, had threaded the needle just enough to give himself political cover on either side. The administration concluded that the pipeline needed further environmental review — a process that, conveniently, wouldn’t be complete until after the election. That was enough to appease the green groups, who read the delay as a sign that he’d eventually kill the project. But in the face of attacks from the right, he could point out that, in fact, he hadn’t killed the project — he was just awaiting the results of the final environmental review.

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And, indeed, as the campaign wore on, it seemed increasingly likely that despite the nod to environmentalists, Obama would probably approve the project.    

At a March speech in Cushing, Okla., the oil-pipeline hub of the nation, Obama said that he would give approval to expedite construction of the southern leg of the pipeline, from Cushing to the Gulf Coast, and hinted that he would eventually approve the more controversial northern leg, which would run from Canada to Cushing.

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