Obama Punts Keystone XL Pipeline

By Dan Berman and Darren Goode, Politico

10 November 11

he State Department on Thursday announced that it's punting a decision on the controversial Keystone XL pipeline until at least the first quarter of 2013 — pushing off a no-win decision for President Barack Obama until well after the 2012 election.

The State Department said it needs more time to "undertake an in-depth assessment of potential alternative routes in Nebraska."

Obama said in statement that he supports delaying a decision.

"Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood," Obama said. "The final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people. At the same time, my administration will build on the unprecedented progress we've made towards strengthening our nation's energy security, from responsibly expanding domestic oil and gas production to nearly doubling the fuel efficiency of our cars and trucks, to continued progress in the development of a clean energy economy."

Environmental groups have been protesting the pipeline that would run from Alberta oil sands to Texas refineries, and there have been rumblings that greens would abandon Obama next fall if he approved it. At the same time, labor unions have backed the pipeline, arguing that it would create badly needed jobs for American workers.

House Speaker John Boehner said the administration's decision to put off a decision represents a "failure of leadership."

"More than 20,000 new American jobs have just been sacrificed in the name of political expediency," Boehner said in a statement. "The current project has already been deemed environmentally sound, and calling for a new route is nothing but a thinly veiled attempt to avoid upsetting the president's political base before the election."

Earlier Thursday, White House press secretary Jay Carney dodged a question about a possible delay. Asked whether the president would like to see the decision postponed until after the 2012 elections, Carney said: "The president wants the best possible decision." He added: "I can tell you the president made clear what the criteria are … and none of those criteria are political."

For months, the conventional wisdom had been that a presidential permit for Keystone XL was inevitable; Secretary of State Hillary Clinton said in October 2010 that she was "inclined" to approve it because it was better to get oil from Canada than from less-friendly nations. The State Department then released a final supplemental environmental assessment in August stating that TransCanada's proposed route is the preferred option.

But the environmentalist protests led by 350.org activist Bill McKibben, as well as opposition in Republican-friendly Nebraska to the proposed route, seem to have led the administration to delay the decision.

Obama himself last week told a Nebraska TV reporter that he would weigh several environmental factors once the department delivers its verdict for him to consider, raising uncertainty about the direction he will take.

Nebraska officials have expressed concern about the proposed route through the state's Sand Hills region and the Ogallala aquifer, which is used as a key source of drinking water and irrigation for several states.

A spokesman for Sen. Mike Johanns (R-Neb.), who is among those opposing the proposed route, said the senator is pleased with Thursday's announcement. "Obviously he would welcome that," the spokesman said. "But if this is a potential re-analysis of the route, it needs to be sincere and not just an effort to push it past the election."

The pipeline has already been under review for 39 months, and the recent decision by the department's deputy inspector general to look into conflict of interest allegations regarding the review may in and of itself push a decision back much further.

But the EPA had yet to weigh in on the department's August analysis and the agency had been critical of the department's prior assessments for not sufficiently taking into account potential environmental harm.

TransCanada spokesman Terry Cunha said Thursday morning it was not aware of any decision from the State Department.

"Over the last few days, we have read, as you have, quotes from unnamed sources making statements about Keystone XL and the review process," a company spokesman told POLITICO. "When we hear from a named source on the record we will comment specifically. Until that happens, our understanding is the department of State is following a process it outlined last spring — to work toward a decision on a Presidential permit by year end."

The plan would be to immediately begin construction after receiving a presidential permit and then to begin operating the $7 billion, 1,700-mile pipeline in 2013.

The pipeline has the support of many Republicans in Congress and also major labor unions like the Teamsters, Laborers' International Union of North America and segments of the AFL-CIO.

Twenty-six members of the House Energy and Commerce Committee — nearly all Republicans — sent a letter to Obama Wednesday urging approval of the existing proposal from TransCanada and noting that the initial commitment by the department to make a decision by the end of the year "appears to be in jeopardy."

This article first appeared on POLITICO Pro at 12:50 p.m. on November 10, 2011.