TransCanada Agrees To New Pipeline Route, Complicating Obama's Decision

Only a few days after the Obama administration seemed to dodge a controversial decision on the Keystone XL pipeline project, TransCanada has agreed to work on a new pipeline route. The company’s concession might initially seem like it would alleviate the pressure on the president to reject the proposal; in fact, it will test whether the White House had been using re-routing as an excuse to hold off on a decision until after the 2012 election, and it will reignite a debate the president had hoped to avoid.

On Thursday, the U.S. State Department announced it would delay its decision on whether to approve the $7 billion, 1,700-mile pipeline until 2013, arguing that they needed more time to explore alternate pipeline routes that would have a less environmentally detrimental impact. The White House no doubt had political reasoning in addition to the given environmental explanation: By pushing back a decision until after the 2012 election had passed, Obama could avoid any electoral repercussions from the energy industry or from anti-pipeline activists. Additionally, some had suggested that more delays on an approval process that has already taken more than three years might persuade TransCanada to give up on the project. Now, the new terms of the proposal have brought the issue back to the table, and further postponing a decision is bound to increase criticisms that the president’s main motivation is political strategy rather than a genuine concern about the pipeline’s route.

To some extent, TransCanada’s decision signifies a victory for environmentalists who had raised serious concerns about the potential for leaks and contamination of Nebraska’s Sandhills region and the Ogallala aquifer. The new route would avoid these sensitive areas, a compromise that Nebraska’s Republican Gov. David Heineman had correctly said would drastically increase support for Keystone XL among the state’s residents.

While the decision to pursue an alternate route has appeased some critics of the pipeline, others will not be satisfied until the entire project is scrapped. The risks to specific areas in Nebraska were only part of activists’ concerns. In large protests in recent months, anti-pipeline groups have often asserted their opposition to any pipeline that would transport oil from the Canadian tar sands on the grounds that tar sands oil is almost a quarter more polluting than conventional crude oil — as studies by the European Commission and others have revealed. As a result, many activists want Obama to intervene and definitively reject the pipeline proposal, regardless of any route changes. While it is possible that the government would use the additional time to determine that the environmental impact of tar sands oil would be too significant in any case, Thursday’s announcement makes it seem as though the administration is far more concerned with the route than with the oil’s pollution.

The delay would temper criticisms and scrutiny of the White House that have been exacerbated as the tar sands controversy has intensified. Specifically, the ongoing Keystone XL debate has brought to light a pro-industry bias within the State Department, with the potential to boil over into a larger scandal as complaints from activists and politicians have led to an investigation of the department’s handling of the project. The State Department, which is responsible for approving the proposal since it crosses a border, released a report in August concluding that the pipeline did not pose any significant environmental risks, but subsequent disclosed emails showed that State Department officials were cheering on the pipeline lobbyists instead of conducting an impartial review. By delaying a final decision on the project, the administration potentially sought to minimize the political effects of a State Department scandal.

Conversely, proponents of the pipeline have suggested that the administration’s slow approval process of the project demonstrates that the president is not committed to reducing dependence on Middle Eastern oil or fighting unemployment. The industry argues that the pipeline would increase the North American energy supply and create jobs, although the impact on the jobs market has been disputed.

Given the mounting pressure from both sides of the debate, the Obama administration’s decision to delay the final review seemed like the most politically smart move. But new developments, with TransCanada willing to use an alternate pipeline route, will reignite the controversy Obama had sought to avoid and put the president in a tricky situation before the election next fall.


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