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%
“He will see more green, so to speak.”
“Postponing the decision is a significant indicator of just how bad the Obama insiders think their election prospects are right now. They are willing to risk independent voters wondering why we don't drill in North America to consolidate the environmentalist vote. They fear the "Corzine calamity" where the incumbent governor lost the support of environmentalists and the election.”
“If anyone other than [Romney] gets the nomination, the WH will have no trouble motivating the base. If it's Romney, keeping Sierra Club happy may be worth it.”
“The issue has become a symbol of environmental protection, an issue category which is essential for the young voters that need to be energized for 2012. Obama landed on the right side, at the right time. Definitely a net positive. “
“This was a risky gamble to make as crude prices approach $100, but Nebraska Republicans may have offered him a modest political shield.”
"The president just killed 20,000 union jobs and put politics in front of our economic and national security."
“No, the delay will be seen as a sign of weakness and indecision - unlikely to mollify environmentalists and a missed opportunity for a real "shovel-ready" project on a large scale - I sure hope he does not think this improves his chances to win NE! “
“The president's green support was never in jeopardy (when has it ever defected?). But the independent and labor vote is not static, and we are already seeing signs both will take a walk this time, largely because of an accumulation of actions like this.”
“The opponents of Keystone will not be satisfied until the project is terminated. The fact that it's still alive means there's an opportunity to get it accomplished, especially considering the House R's will continue to fight for it.”
National Journal’s Energy and Environment Insiders Poll is a periodic survey of energy policy experts. They include:
Jeff Anderson, Paul Bailey, Kenneth Berlin, Andrew J. Black, Denise Bode, Kevin Book, Pat Bousliman, David Brown, Neil Brown, Stephen Brown, Kateri Callahan, McKie Campbell, Guy Caruso, Paul Cicio, Douglas Clapp, Eileen Claussen, Steve Cochran, Phyllis Cuttino, Kyle Danish, Lee Dehihns, Robbie Diamond, David Di Martino, Bob Dinneen, Sean Donahue, Jeff Duncan, John Felmy, Mike Ference, David Foster, Josh Freed, Don Furman, Paul Gilman, Richard Glick, Kate Gordon, Chuck Gray, Jason Grumet, Christopher Guith, Lewis Hay, Jeff Holmstead, David Holt, Skip Horvath, Bob Irvin, Bill Johnson, Gene Karpinski, Joseph T. Kelliher, Brian Kennedy, Kevin Knobloch, David Kreutzer, Fred Krupp, Tom Kuhn, Con Lass, Mindy Lubber, Frank Maisano, Drew Maloney, Roger Martella, John McArther, Mike McKenna, Bill McKibben, David Miller, Kristina Moore, Richard Myers, Aric Newhouse, Frank O'Donnell, Mike Olson, T. Boone Pickens, Thomas Pyle, Hal Quinn, Rhone Resch, Barry Russell, Joseph Schultz, Bob Simon, Scott Sklar, Bill Snape, Jeff Sterba, Christine Tezak, Susan Tierney, Andrew Wheeler, Brian Wolff, Franz Wuerfmannsdobler and Todd Young.
This article appears in the November 16, 2011, edition of NJ Daily.