Bloomberg Businessweek
By Jim Efstathiou Jr. and Kate Andersen Brower
Nov. 11 (Bloomberg) -- Delaying a decision on TransCanada Corp.’s Keystone XL oil pipeline will help President Barack Obama repair frayed relations with environmentalists as he runs for re-election.
A State Department official said politics played no role in its announcement yesterday that it will study alternate routes for the $7 billion pipeline, delaying a decision on approving it until after the 2012 election.
That wasn’t the assessment of pipeline supporters such as Republican House Speaker John Boehner, who called the move an effort to “avoid upsetting the president’s political base.” Obama’s environmentalist allies, who welcomed the action, agreed.
“There is a political component,” Erich Pica, president of Friends of the Earth in Washington, said in an interview. “You’re seeing more and more Obama donors or potential Obama donors from the environment community publicly saying they weren’t going to give him money. What this decision means is that the president is paying attention and listening.”
The 1,661-mile (2,673-kilometer) pipeline would deliver 700,000 barrels a day of crude from Alberta’s oil sands to the Gulf of Mexico by crossing Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.
The delay responds to concerns among Nebraska citizens, state officials and some members of Congress that TransCanada’s proposed route across that state’s Sandhills area risks the Ogallala aquifer, the drinking-water source for 1.5 million people.
Department’s Comment
“The White House did not have anything to do with this decision,” Kerri-Ann Jones, assistant secretary of State for oceans and international environmental and scientific affairs, told reporters on a conference call yesterday when asked if politics affected the decision. “They did not direct us to make this decision.”
The State Department, with jurisdiction over the pipeline because it crosses an international border, said in a statement the study “could be completed as early as the first quarter of 2013.”
“Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood,” Obama said yesterday in a statement.
Russ Girling, chief executive officer of Calgary-based TransCanada, said previously that rerouting delays might kill the project. Yesterday, he said the company remains “confident Keystone XL will ultimately be approved.”
‘Too Important’
“This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed,” Girling said in a statement.
Boehner’s comments, in an e-mailed statement, were echoed by Thomas Donohue, president and chief executive officer of the U.S. Chamber of Commerce, the nation’s largest business lobbying group.
“This is clearly a political decision, and everyone knows it,” Donohue said in an e-mailed statement. “Unfortunately, it will immediately cost more than 20,000 Americans an opportunity to get a job working on the pipeline and hundreds of thousands more jobs in the future.”
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