Thursday, March 22, 2012

The Pipeline to Nowhere

    CNN reports today that President Obama will endorse the permitting of the southern half of the controversial Keystone XL pipeline:
President Barack Obama plans to announce in Cushing, Oklahoma, on Thursday that his administration will expedite the permit for the southern half of the Keystone XL pipeline, a source familiar with the president's announcement told CNN.
In January, the Obama administration denied a permit for the 1,700-mile-long Keystone XL oil pipeline, which would stretch from Canada's tar sands development to the U.S. Gulf Coast. That decision was met by persistent Republican criticism that the president has not been doing everything possible to create jobs and combat high gas prices.
Late last month, TransCanada, the company behind the Keystone XL Pipeline, announced it would move forward with the process to build the southern half of the pipeline, which would begin in Cushing - the president's third stop on his two-day energy tour. The White House praised the move.
Senior administration officials would not confirm the president's plan to unveil the effort to cut red tape for the project, though one senior administration official acknowledged the need to deal with the glut of oil in Cushing, where oil from the Midwest hits a bottleneck as it is transported to the Gulf of Mexico.
    It's a far cry from what the pipeline's backers had sought, and the timing of the announcement has led to suspicions that the Obama administration is seeking a way to blunt criticism of the January rejection of the full project.  The recent rise in gas prices also has had the president looking for ways to show that he is trying to help bring down the cost of energy even while claiming a general inability of government to do so.  Needless to say, there will be mixed reactions to this partial permitting announcement.  NPR reports:
What's clear is that Obama's announcement won't be met with cheers from oil executives. The heads of four big energy companies — Continental Resources, Chesapeake Energy, Devon Energy and Sandridge Energy — said as much in an an open letter to the president published in The Oklahoman.
Their message to the president: Approve the entire XL pipeline, now. They write:
"Approval of the entire Keystone XL pipeline should happen now — not after the election. Yes, we are pleased TransCanada decided to build a critical section of the project from Cushing to the Gulf Coast. We note that this section doesn't require State Department approval. However, America's greatest benefit will come when we can transport oil from our best energy partner, Canada, and oil-rich North Dakota and Montana."
    Although most would have to acknowledge some benefit to the partial construction of the pipeline, the section being fast-tracked is only a fraction of the total project.  As the general election season draws near, will the Keystone XL Pipeline turn into the 2012 version of Sarah Palin's support for the Bridge to Nowhere that was resurrected as an issue when she was named John McCain's running mate?  Except in this case, it wouldn't be support for an expensive government project with questionable benefits, but rather the government's lack of support for a private sector project with multiple unquestionable benefits, not the least of which would be thousands of jobs.  The president can only hope that the parallel doesn't catch on.

This post was originally published on March 21, 2012 at Blogger News Network.

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