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Policy / ENERGY

Keystone Decision Looms Large for Obama

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

photo of Coral Davenport
November 9, 2012

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.

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.

“This whole issue of the Keystone pipeline has generated a lot of controversy and a lot of politics,” Obama said at the time, but added, “We’re happy to review future permits. Today, we’re making the southern leg a priority. The northern portion, we’re going to have to review properly.”

Public support for the project is high. A March Gallup poll found that a solid majority of Americans — 57 percent — support construction of the pipeline, while just 29 percent oppose it.

The company that plans to build the pipeline, TransCanada, is confident that the administration will give them the go-ahead. “We continue to believe that the Keystone XL Pipeline will be approved,” TransCanada spokesman Grady Semmens told National Journal in an e-mail. “The facts that support the approval of Keystone XL remain the same—and the need for this pipeline grows even stronger the longer its approval is delayed.”

Canadian Prime Minister Stephen Harper is also hopeful that Obama will approve the project. “The president has told me several times that he hasn’t yet made a decision, that he will follow the regulatory process in the United States, and evidently the next steps will be very soon, and I remain optimistic,” Harper said during a visit to India on Thursday, Reuters reported.

But the environmental groups that protested the pipeline last year are planning to reprise their demonstration in full force — and make a case to Obama that approving the project will destroy his chance to create a legacy on climate change. Bill McKibben, the activist who galvanized last year’s Keystone protests at the White House, is planning a second round on Nov. 18.

“This is the first big test of President Obama’s legacy,” McKibben told National Journal.

“We’ll find out what he actually thinks about this. We’re not letting up. This is our one big ask.”

McKibben acknowledged that with the election over, green groups no longer hold political leverage over the White House. But the environmentalists will appeal to what they believe are Obama’s core convictions on climate change. They’ll also remind him of how hard they worked to get him reelected. The League of Conservation Voters, for example, spent $14 million — more than the group has spent on the last three election cycles combined — in campaigning to support Obama and pro-environment Democrats in the House and Senate.

Green groups will also pay close attention to Secretary of State Hillary Rodham Clinton’s role in the decision. “If she plays any part in it this, it is a test for her if she runs for president in 2016. We’ll remember,” McKibben said.

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