November 15, 2011

Keystone bends but not the White House

According to a Fox News report, TransCanada is willing to re-route the Keystone pipeline after the Obama administration said it needed at least another year to assess the environmental implications of running the pipeline through some environmentally 'special' areas.  You would think that would be a big step forward considering that the alternative being openly contemplated is for Canada to sell that 700,000 barrels of oil per day (approximately 3.5% of U.S. daily consumption), oil to the Chinese.  But that's not the case.

Clearly Canada would rather sell the oil to it's neighbor, ally, and largest trading partner rather than a country whose trading practices hurt Canada much like it hurts the United States.  To that end, the proposal has been adapted to the needs of the prospective customer.  Unions, should be excited and even environmentalists are cautiously optimistic about with the move (in a don't trust but verify sort of way).  Not good enough says the White House;
Alex Pourbaix, TransCanada's president for energy and oil pipelines, said rerouting the Keystone XL line would likely require 30 to 40 additional miles of pipe and an additional pumping station. The exact route has not yet been determined, but Pourbaix said Nebraska will play a key role in deciding it.

But the State Department cautioned that "nothing has changed" in its review process.

"Any new proposed routes will be subject to the thorough, rigorous and transparent review process we have undertaken throughout," spokesman Mark Toner said. "The process requires a supplemental Environmental Impact Statement for the new proposed route."
In other words, this will do nothing to change the operational window of the White House.  In fact it could mean a longer delay as a new assessment is required.  The reason for the continued delay, is still clearly political.  The White House does not want to anger environmentalists while still holding out hope for labor unions so that they are on board for 2012.  One last political notch for the Obama team - Nebraska senator Ben Nelson's seat in the Senate is on the bubble in 2012.  The non-decision adds no additional pressure to his attempts at re-election.  You'll remember Ben Nelson from the Cornhusker kickback during the Obamacare debacle.  Nelson will be in tough this election cycle and Obama not making waves helps out a Democrat in trouble.

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