Obama Stumbles into Keystone XL Trap

By Kennedy Maize

Washington, D.C., January 18, 2012 – In denying TransCanada’s permit for the Keystone XL pipeline to move oil from Alberta’s tar sands projects to U.S. refineries, the Obama administration has stepped directly into a Republican political trap. Given how savvy the Obama folks are about these sorts of events, I confess I’m surprised by what I regard as a misstep.

Let me make two disclosures up front. First, I’m an Obama fan. I supported him in 2008, gave him money, worked for his election. I will do the same this year. Second, I often disagree with his energy policies, as I have done with all of his predecessors of both parties. I believe he should approve the Canadian pipeline project, primarily because denying the permit serves no purpose other than green grandstanding while approving it provides some positive benefits to the U.S. In giving the project his thumbs down, Obama is playing to his environmental base, which has found his policies lacking and confounding of late.

But let’s get to the trap in which the White House finds itself ensnared, without getting into the weeds of the merits of the pipeline. The GOP’s position on the pipeline has been every bit as political and cynical as that of the Democrats, only cleverer. Some Republican campaign strategists had been hoping that Obama would nix the project – and several have told me this on background. In rejecting the pipeline on global warming grounds, Obama is defending territory that has little political value outside those already committed to his cause. Republicans have dismissed global warming as a losing political proposition and the polling shows they are right. So Obama gains little in taking on the pipeline.

But in trying to shore up his green flank, Obama angers the labor component of his party’s political foundation.  No experienced observer pays any attention to any claims during a campaign about how many, or how few, jobs a particular policy or project will create, because these numbers are essentially unknowable. But the Keystone project certainly would create union jobs that don’t exist today.

Beyond that, the GOP critique of the Obama administration is that it isn’t doing enough to move the U.S. away from a dependence on foreign oil. It’s hard to argue that Canada is analogous to Saudi Arabia or Iran. All this is bogus, of course, because oil is fungible, which cuts both ways in the argument over the pipeline. But it works for Republicans, particularly because the Canadian crude will flow out of North America and likely into Asia. Most folks don’t pay close attention to the details on disputes such as that over the Keystone XL pipeline. Why should they? Most folks have more important things on their minds, such as going to work every day if they can, paying the mortgage, and other draining details of daily life. So the Republicans will use the pipeline decision as evidence of a White House that cares more about the sea level in Bangladesh than jobs in Oklahoma.

The Democrats knew about the political perils of the pipeline. The Obama administration earlier tried the kick-the-can ploy on Keystone XL, putting off a decision until after the coming election. The Republicans in Congress trumped that by tying an early decision on the pipeline onto crucial spending legislation.

Could Obama have avoided this political leg hold laid by the GOP? I suspect he could. He could have announced, within the legislative deadline, that his administration was approving the pipeline, but with conditions that TransCanada would have to make to satisfy concerns raised about the project. This has already occurred once, with TransCanada agreeing to change the original route across Nebraska to avoid the Ogallala Aquifer. The White House could have come up with a set of additional conditions, requiring additional work and paperwork on TransCanada’s part, before the approval would be final, but it would be “approved.” Then, when the GOP and the pipeline supporters cried foul on the administration decision, the White House could respond, as they have with the latest flap over recess appointments, “So sue us.”

My choice would have been to approve the project straight up. But if the administration didn’t want to face the political fallout from that action by its environmentalist supporters, it could have finessed the issue. Instead, it stepped into the GOP’s carefully-laid trap.

Will this decision have a significant impact on the coming presidential election? I doubt it. Energy and environmental issues are at most second tier these days. The election is likely to turn on bigger, more important topics. But campaigns are built incrementally, so sometimes second level concerns can make a difference at the margins, where elections are often won.