Keystone Pipeline Project Delayed

Yesterday’s big story was Obama’s rejection of TransCanada corp’s $7 billion Keystone XL pipeline project, which would have carried carbon-heavy crude oil from the tar sands of Alberta to refineries in Texas. Environmentalists cheered. Conservatives seethed. But in reality, the decision is far from final.

First proposed in 2008, the project was reviewed by the EPA and ultimately needed Obama’s approval to begin construction. It faced heavy opposition from environmental groups, who see it as a backwards step on climate change and a serious threat to the culture and environment of America’s heartland.

Supporters lauded the plan as a major job creator and a step to reduce our dependence on foreign oil.

After a series of protests this summer against the pipeline, many are crediting environmental groups’ grass roots efforts for pressuring the president to reject the deal.

Though many view this decision as bold pre-election move designed to fire up environmentalists and (for once) demonstrate Obama’s willingness to stand up to big oil, Obama himself is being politically cautious, not even citing environmental concerns as the motivation for his decision:

“The rushed and arbitrary deadline insisted on by congressional Republicans prevented a full assessment of the pipeline’s impact…

This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the state department from gathering the information necessary to approve the project and protect the American people.”

So the celebration on behalf of environmentalists may be short lived. When announcing the decision, the State Department noted that their denial of the permit application “does not preclude any subsequent permit application or applications for similar projects.”

Inviting TransCanada to reapply after the election is really just a passing of the buck; a political move that shouldn’t be taken serious by Democrats or Republicans until the issue is resolved for good.

Investors in TransCanada aren’t too disheartened by the news (stock prices only dropped .8%), a sign that the project is ultimately expected to begin. There’s also a possibility that TransCanada could still begin construction on the Southern leg of the project.

So really, it’s too soon to tell who will be victorious in the end. Yesterday’s announcement is beginning to look less like big news and more like fodder for a hollow re-election talking point.

By: Mike Guisinger

(Photo courtesy of Reuters)