If any segment of the U.S. electorate should have whooped it up after Barack Obama won a second term in office, you’d think it would be his supporters with an environmental bent, who are vehemently opposed to the $7.6-billion Keystone XL pipeline project.
Instead, thousands of environmentalists gathered in front of the White House on Nov. 18 to loudly remind the president that when they voted for him they voted to put a bullet in KXL, which would ship bitumen from Alberta’s oilsands directly to Texas refineries. After all, Obama was the candidate with the visible green streak who had turned down the project once already, last January. Obama’s Republican rival, Mitt Romney, vowed during the campaign he’d approve Keystone on Day 1 of his presidency. Obama, meanwhile, maintained a poker face on the project’s prospects.
“We have no idea what Obama is going to do,” admits Daniel Tessler, a spokesman for 350.org, the organization behind the anti-Keystone rally. “The president didn’t talk much about climate change during the election.…So its a real mystery what his position is.”
Obama is torn, chimes in Kenneth Warren, a pollster and professor of political science at Saint Louis University, “because there are two factions in his party that are split over it. Because environmentalists—and of course Democrats are the more environmental party—are definitely against it. And yet the other faction of the party is for job creation.”
The day after the election, pipeline proponent TransCanada Corp.’s stock dipped 2%. The company, though, sounds more optimistic than investors. “We continue to believe that the Keystone XL pipeline will be approved,” it said in a post-election statement, citing growing support for the investment, jobs and energy security the line promises. The project faces a crucial hearing on its rejigged application, involving a detour around the environmentally sensitive Sand Hills region of Nebraska, on Dec. 4. But the final decision is again expected to be a political one.
Val Mirosh, a retired former vice-president at TransCanada, is heartened by the fact that Obama never once declared he wouldn’t approve Keystone. But to approve it before the election would have hurt his chance of regaining the presidency. Mirosh believes Obama will approve Keystone, though perhaps not as quickly after his Jan. 20 inauguration as the company is hoping for—more like late 2013.
Stephen J. Randall, a professor of U.S. history at the University of Calgary, agrees the president can now better afford to antagonize his green base for the sake of the economy. “As long as the [revised application’s] environmental factors line up effectively, [Obama] will approve this,” Randall predicts.
If so, it will be a “critically important” decision for Alberta oilsands producers, says Roger McKnight, senior petroleum analyst with En-Pro International Inc. in Oshawa, Ont. In the short term, KXL would go a long way to closing the up to $30-a-barrel price gap between Alberta and world crude prices. Longer term, it would be a vital piece of infrastructure getting Canada’s growing production to market.
Though optimistic Keystone will get the green light, Cal Dallas, Alberta’s minister of International and Intergovernmental Affairs, insists the province and oil producers aren’t placing all their hopes on Keystone. Other projects are being considered to ship Alberta crude eastward to markets in Ontario, Quebec and the eastern seaboard. “I don’t think Keystone has ever been looked at as a single source of relief in terms of addressing the ongoing increases in production that are happening in Alberta,” he says.