Keystone XL oil pipeline ensnared in political gamesmanship

Republicans tried to force Obama's hand on the permit to construct the Keystone XL oil pipeline, and now he's forced theirs. The fight may not be over, signaling that energy will be a 2012 campaign issue. 

No doubt about it, the proposed 1,700-mile-long Keystone XL oil pipeline has become a political ping-pong ball, with congressional Republicans and President Obama batting it back and forth with rising election-year ferocity.

In denying a construction permit for the controversial energy project on Wednesday, well ahead of the Feb. 21 deadline for announcing his decision, Mr. Obama caught his congressional adversaries off guard. The Obama campaign then immediately released its first broadcast ad of the 2012 campaign, accusing "secretive oil billionaires" of spreading misinformation about the administration's record on clean energy.

Obama's move, and the previous one by Congress to graft the pipeline decision onto end-of-year legislation to extend the payroll tax cut for American workers for 60 days, indicates that the nation's energy future is likely to be a significant campaign issue in Election 2012. 

The president signaled that his pipeline decision included some tit for tat. “This announcement is not a judgment on the merits of the pipeline but the arbitrary nature of a [congressional] deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people,” Obama said.

GOP congressional leaders, of course, slammed the decision. Senate minority leader Mitch McConnell of Kentucky said the move “shows a fundamental disconnect with job creation in this country.” House Speaker John Boehner said: “This is not the end of the fight.”

Republicans could yet try to revive the oil pipeline, perhaps by attaching it to upcoming legislation. Congress must soon take up the payroll tax cut, again, and needs to address a looming 27 percent cut in fees to physicians who treat Medicare patients, as well as whether to continue to extend federal jobless benefits.  

A conference committee set up to resolve an impasse over extending the payroll tax cuts through fiscal 2012 has set its first formal meeting for next Tuesday afternoon, upon the Senate's return. Senate Finance chairman Max Baucus (D) of Montana and House Ways and Means chairman Dave Camp (R) of Michigan, the lead negotiators, have begun informal discussions.

 Many energy-state Democrats, as well as trade unions with a stake in the project, backed the pipeline and opposed Obama’s decision to sideline it. The Laborers’ International Union of North America called the White House decision “politics at its worst.”

“Once again the president has sided with environmentalists instead of blue collar construction workers – even though environmental concerns were more than adequately addressed,” said LIUNA president Terry O’Sullivan, in a statement. “Blue collar construction workers across the US will not forget this.”

The pipeline, which is to extend from the oil sands of Alberta, Canada, to refineries in Texas, is projected by its owner to create some 20,000 jobs in construction and related suppliers and to deliver some 830,000 barrels of oil per day to US refineries – or about half of what the US currently imports from the Persian Gulf.

Environmentalists caution that a spill could be disastrous, especially in the scenic Nebraska Sandhills and the Ogallala Aquifer, where the pipeline is currently sited.  

“The Keystone XL pipeline is a complex project which deserved the careful consideration regarding its environmental and economic impacts that the Obama administration planned to provide,” said the National Resources Defense Council and other environmental groups and unions, in a statement on Jan. 18. They called the GOP push for a rapid decision in exchange for extending payroll tax cuts “a cynical move.”

Obama administration officials say approval of the pipeline project is still possible, but it will require owner TransCanada to propose a new route through Nebraska.

Meanwhile, the National Republican Congressional Committee, the campaign arm of House Republicans, is ramping up its own campaign to dub the White House decision “part of a deliberate Democrat strategy to ‘explicitly abandon’ the working class in 2012.

“Canada has energy and jobs that could be destined for the United States of America, and this administration has just decided that instead they should be destined for China,” said House GOP conference chairman Jeb Hensarling of Texas, at a briefing on Jan. 18. “It’s a sad day.”