Political support for a project crucial to US energy interests is eminently welcome—but not when it threatens those interests in broader and deeper ways.
Republicans in the US House of Representatives attached support for the proposed Keystone XL pipeline, linking the oil sands of Alberta with refining centers on the Texas Gulf Coast, to a popular bill extending a reduction of the payroll tax rate. The Obama administration, bowing to its environmentalist supporters, had delayed approval of the well-studied project for even more study—until after next year's general elections. The Republican bill requires the president to decide whether to approve the pipeline within 60 days.
Alienating supporters
If forced to act on Keystone XL before the election, Republicans knew, Obama would alienate an important group of supporters, whatever his decision. Rejection of the pipeline would anger labor unions. Support of the pipeline would anger environmentalists. And if congressional Democrats spared him the dilemma by letting payroll tax relief expire at yearend, Republicans would blame them for the consequent lowering of take-home pay at the start of 2012.
But Democrats know how to play this game. On Dec. 17, the Senate, which they control, passed a 60-day extension of tax relief in a bill also containing, among other things, the requirement for an expeditious decision on Keystone XL. The measure essentially would defer action until February but prevent the new-year tax increase. After passing the bill, the Senate adjourned. On Dec. 20, the House rejected the Senate bill and called for a conference committee in which to reconcile differences. At this writing, Senate Democrats seemed uninterested in that option, content to call Republicans obstructionist.
What a mess. And what pointless peril for an important project.
Early rejection of Keystone XL would be perverse. The pipeline might have been approved no matter who wins the presidency. A Republican winner in the elections would okay the pipeline soon after taking office. And a reelected Obama might well do likewise after completing the supposed studies on which he based this year's delay. At the beginning of a second term, he would need to bolster a foundering economy and act on stubbornly high unemployment. Such a decision would anger environmentalists. But at that point Obama would need labor support more than theirs. He could say he had studied the project thoroughly and found no serious threat—because there is no serious threat. And he'd find other ways to appease environmentalists.
Now, however, Obama can't afford to lose the environmentalist vote. So in February he might kill the pipeline, saying Republicans forced him to decide prematurely, assuaging unions by arguing he couldn't in good conscience approve the project before all the facts were in.
Republicans will receive at least as much blame as Democrats do if Congress doesn't act on payroll tax relief. They instigated this showdown—or so Democrats will insist to voters.
Republicans have lost sight of a broader imperative: reclaiming the White House. It's difficult to see how letting themselves get maneuvered into looking obdurate serves that goal.
The controversy: oil
Controversy over Keystone XL isn't about tubular metal in the ground; it's about oil. It isn't even about the supposedly dirty oil of Alberta; it's about oil in general. Hard-core opponents of the pipeline dislike the project because it would extend the supply of an energy source they detest and markets prefer. That's the core of the controversy.
The presidential election is about oil, too. Obama steadfastly promotes uneconomic forms of energy with federal subsidies and mandates and discourages development of oil, whatever the cost—and the cost is out of control. His approach is economically unsustainable any time and foolish when the economy is as weak as it is now. Republicans should be making those arguments, not resorting to political brinksmanship and elevating prospects for two costly outcomes: 4 more years of an antioil president and no hope for Keystone XL.
More Oil & Gas Journal Current Issue Articles
More Oil & Gas Journal Archives Issue Articles
View Oil and Gas Articles on PennEnergy.com