The Keystone XL pipeline is far from dead, National Journal’s Energy and Environment Insiders say.
After the Obama administration pushed back approval of the project last Thursday pending a reroute in Nebraska, it was declared all but dead both by opponents celebrating victory and by many pipeline proponents mourning its purported demise. But when the dust settles, 64 percent of Insiders say, the $7 billion pipeline project will move forward.
“As long as there is substantial money to be made from developing the tar sands, they will be developed,” one Insider said. The pipeline would bring more than 700,000 barrels of carbon-heavy tar-sands oil from Alberta, Canada, to Gulf Coast refineries on a daily basis.
Insiders predict that the economic and political reasons for the pipeline will eventually win out, arguing that the oil industry may hold out hope for a future Republican administration and GOP majorities in both chambers of Congress—under which the project would likely win swift approval.
Canadian pipeline developer TransCanada said on Monday that it will move the route out of Nebraska’s environmentally sensitive Sandhills area. The State Department last week proposed the rerouting to protect a massive aquifer there. Company officials, who had claimed that such a reroute wasn’t possible, said on Monday that the move will likely require adding 30 to 40 more miles of pipe to its 1,700-mile proposal.
The state of Nebraska will play a key role in developing the final pipeline route, Alex Pourbaix, TransCanada’s president for energy and oil pipelines, said in a statement, expressing confidence in getting final approval.
State Department spokesman Mark Toner insisted on Monday, “Nothing has changed in the process since last Thursday’s announcement,” adding that the administration still expects to complete its evaluation by 2013, effectively delaying a decision until after the 2012 general election.
President Obama was accused last week for making a political play with the pipeline, because the reroute would delay the decision past the 2012 election. For that same reason, though, most Energy Insiders believe the project will ultimately be approved. “Eventually, politics will be set aside,” said one.
Still, 36 percent of Insiders said the reroute would kill the controversial project, citing political factors. The poll was conducted from Nov. 11-15, so some Insiders responded before TransCanada’s announcement on Monday.
In terms of politics, Insiders were split on whether the reroute decision and the consequent delay would benefit Obama. Just over half – 51 percent – said that the delay would help the president; 49 percent said it would not.
The delay until after the 2012 election “is a significant indicator of just how bad the Obama insiders think their election prospects are right now,“ one Insider said. In appeasing environmentalists but sacrificing some independent votes, the administration wanted to ensure it held onto its political base and contributions, Insiders said.
“Although [environmentalists] were not likely to favor any of the Republicans in the eventual election, this may create energy to support Obama where it might have been lacking if he had let the EIS go through,” said one Insider.
But others still argued that the environmentalist and youth vote was never going anywhere and by delaying the decision, Obama simply invited ire from Republicans and independent voters.
“I was surprised by the political calculus here,” one Insider said. “I think the Republicans will be able to make a lot of hay out of it.”
Will the State Department’s Keystone XL pipeline reroute and consequent delays kill the controversial project?
- Yes 36%
- No 64%
“TransCanada’s shippers, who will employ refinery workers and produce gasoline for Americans, will give up later next year after concluding they can’t trust the president.”
“If the president gets reelected, it does [kill the pipeline.”
“There are other markets for the oil. Is that Beijing calling?”
“My guess is that the corpse will spend most of 2012 twitching but that the Canadian government and TransCanada will aggressively begin seeking a China solution to this problem. If Obama gets reelected, there is no way this thing goes forward.”
“The project will be built; this unfortunate and unnecessary delay will only add to its cost. The environmental review considered routing changes; this rerouting is entirely political in nature, and has nothing to do with environmental impact.”
“Americans are addicted to oil. Like the Arctic National Wildlife Refuge drilling issue, this one won't go away for a while.”
“The pipeline project will still go forward. The economic and political momentum is important enough to move tar-sands oil to the Midwest and Gulf or rerouted to the West Coast and Asia.”
“It's a very-long-term play in the oil business, and the players are not only well-healed but they also may find ways to keep their options open in hopes of a future Republican administration and Congress that will be much friendlier to oil interests.”
“Unless the economics of the project dictate an earlier decision, it won't be killed by this delay.”
Will President Obama benefit politically from this reroute decision? If so, how? (specify in comments)
- Yes 51%
- No 49%
This article appears in the November 16, 2011 edition of NJ Daily.