Keystone: Crack Pipeline Politics

The Governor of Nebraska, Dave Heineman, has approved a new route for the long-delayed Keystone XL pipeline.  But now the State Department is slow-walking the final decision as long as it can.  State has the say on Keystone because the pipeline will cross a national boundary.  This is actually good news, since State has to deal with Canada directly about many matters, unlike the EPA, which can disregard Canadian interests. I’ve always thought this was the decisive factor in why the pipeline would eventually be approved.  But now I’m less sure.

Obama once again promised action on climate change in his inaugural address.  Item 1: There is zero chance of cap and trade ever passing, and I’m sure most Democrats never want to hear the phrase again.  Item 2: Obama’s own spokesman Jay Carney said some weeks ago that the White House would “never” propose a carbon tax, which is the simpler alternative, and which some energy companies (such as ExxonMobil) have said is acceptable.  Yet there are also widespread accounts around Washington that Obama has reassured environmentalists that he is determined to “put a price on carbon” in his second term.  Hmmm.  This promise doesn’t square with Items #1 and #2.  So what can he do?

Perhaps Obama could hold out Keystone approval (which easily has majority support in the Senate, if Harry Reid allowed a vote on it) if Republicans will agree to some kind of climate deal.  I doubt this is realistic, and I doubt Obama’s opposition to Keystone can be sustained indefinitely, though it is possible that if he holds out long enough, Canada will say “screw this” and start planning an alternative pipeline to British Columbia and ship the oil to China, which will happily buy it.  You never know; given Obama’s desire to break the Republican Party, holding out Keystone as a carrot in an ambiguous deal might well appeal to his political strategy.

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