2. CAMPAIGN 2012:

If Kerrey runs for Senate, Keystone XL dilemma awaits

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As Bob Kerrey weighs a bid to reclaim the Nebraska Senate seat he ceded to Ben Nelson 11 years ago, the former Democratic governor also must decide how to handle a volatile issue for Cornhuskers that he has not yet publicly addressed: the Keystone XL pipeline.

That Kerrey has not staked out a position on Keystone XL is not necessarily surprising, since he is still undeclared as a candidate to replace the retiring Nelson. But given the groundswell of skepticism the oil link faced in Nebraska last year before its sponsor offered to build around the sensitive soil of the state's Sand Hills, Kerrey is likely to face fast pressure to weigh in if he enters the race -- with a potential price to pay for turning off either anti-XL liberals or independents.

Asked about Kerrey's lack of a public stance on the pipeline, Sen. Mike Johanns (R-Neb.) noted that "he hasn't lived in the state for a long time," echoing the GOP line of attack already in use against the Democrat for living in New York since leaving Congress.

"But I suspect that if he decides to be a candidate, he's going to start" disseminating positions on high-profile energy issues very quickly, Johanns added in a brief interview last week.

Should Kerrey jump into the Senate hunt, a move he could make as soon as this week, the retiring Nelson offers a compelling political model of how to tackle Keystone XL while alienating neither voters who fear the pipeline's environmental footprint nor those who welcome the jobs and Canadian crude imports the project would provide.

Nelson supports the ultimate goals of the XL line but joined many Nebraskans in resisting TransCanada Corp.'s previous plans to route it through the Sand Hills. Now that the company has agreed to skirt around that area, a prized refuge for many in the state, Nelson remains cool to GOP legislation that would override President Obama's recent veto of the pipeline.

Nelson explained last week that his lack of interest in those Republican bills stems not from opposition to the pipeline but from "the deadline factor," displaying the finely tuned political skills that won him praise last year from leading anti-XL activist Jane Kleeb (E&E Daily, Nov. 7, 2011).

The retiring incumbent added that he has talked to Kerrey about the latter's potential candidacy but declined to reveal whether Keystone XL messaging was part of those conversations. "You never second-guess your friends or colleagues on how they conduct themselves," Nelson said.

Into a minefield?

Pro-pipeline advocacy groups such as the tea party-backed Americans for Prosperity (AFP), however, are already on the air with ads slamming Kerrey's record and reminding Nebraskans of his previous support for cap-and-trade climate change legislation.

"He's facing questions already -- anybody who wants to represent Nebraska in Congress, they have to give us their opinion about" Keystone XL, said Brad Stevens, chief of AFP's Nebraska chapter. "Our purpose is to get the word out about Bob Kerrey's issue positions. ... If that proves to be an uphill battle for Bob Kerry, I guess that's his problem."

Despite the public prodding he could get from groups such as AFP, funded in the past by the conservative energy magnates Charles and David Koch, Kerrey could see a political upside in tiptoeing around the Keystone XL minefield by aligning with Nelson's position.

"The way he uses it to his benefit is by, on the one hand, insisting on protecting the Sand Hills and the [nearby Ogallala] aquifer and, on the other hand, noting how important the pipeline is for job creation and energy security," said University of Nebraska, Omaha, assistant political science professor Paul Landow in an interview. "I think it would be well-received."

A survey released two weeks ago by GOP firm Magellan Strategies found Kerrey in need of any boost he can get, with the Democratic maybe-candidate winning no more than 40 percent of likely voters against both of his highest-polling GOP opponents -- state Attorney General Jon Bruning and state Treasurer Don Stenberg.

The crowded Republican primary, set for May, might give Kerrey a foe whose record on Keystone XL "could be strategically exploited as the campaign goes on," said Michael Wagner, assistant political science professor at the University of Nebraska, Lincoln.

But Kerrey remains "in a really tough spot," Wagner added in an interview, noting that the reroute of the pipeline is largely uniting Nebraska Republicans around the project. "He's got to overcome being called a carpetbagger, and the registration advantage of Republicans. He's got to find three or four issues -- like this one -- to drive doubts into the hearts of moderate Republicans."

Green and liberal groups such as Kleeb's Bold Nebraska condemn Keystone XL, which would carry 700,000-plus barrels per day of emissions-heavy Canadian oil sands crude to Gulf Coast refineries, as a shortcut to continued U.S. oil dependence and a risk to the aquifer. Industry interests and GOP-aligned groups such as AFP, by contrast, tout the pipeline as a job creator that stands to displace fuel imports from the unstable Middle East.