Pipeline's fate to provide early test for re-elected Obama

Almost as soon as the networks had declared victory for President Obama last night, environmental activists announced plans for a White House protest over the fate of a controversial oil pipeline.

It was a reminder of one of the biggest energy policy decisions Obama will have to make in his second term: whether to approve the Keystone XL pipeline that would transport crude from Canada's oil sands to the Texas Gulf Coast.

In putting off a final decision on Keystone until after the election, Obama was seen as giving himself some breathing room to make a call likely to upset a key Democratic constituency whichever way it went. Approving the pipeline would anger environmental groups who say developing the oil sands would sound a death knell for the climate. But denying it would upset labor unions in sectors that would benefit from the thousands of jobs that would be created through its construction.

By disapproving an initial permit for Keystone to cross the U.S.-Canada border, Obama unlocked a barrage of criticism from congressional Republicans and industry groups.

The president said he denied the permit over concerns that Keystone's route would threaten water supplies and sensitive landscapes in Nebraska, and the company behind the pipeline, TransCanada, agreed to reroute the path through the state and reapply for the permit. Nebraska regulators are reviewing the new route, and the Obama administration will consider their recommendations, with a final decision expected in the first quarter of next year.


Meanwhile, Obama already has endorsed Keystone's southern leg, which runs from Cushing, Okla., to the Gulf Coast. And throughout the campaign he called for an "all of the above" strategy that included continued support for oil and natural gas.

The administration has kept its cards close to the vest, but some environmentalists privately worry the pipeline will be approved. TransCanada has been vocal about its optimism.

"We continue to believe that the Keystone XL Pipeline will be approved," TransCanada spokesman Shawn Howard said in a statement this morning. "The facts that support the approval of Keystone XL remain the same -- and the need for this pipeline grows even stronger the longer its approval is delayed."

Environmental activist Bill McKibben, who founded the group, has been leading the opposition to the Keystone project, and his group announced another Keystone protest just minutes after Obama was declared the winner last night. The Nov. 18 protest at the White House is part of a broader "Do the Math" tour the group is launching.

The effort builds on an article McKibben wrote for Rolling Stone earlier this year calculating the amount of carbon dioxide that could still be released into the atmosphere to limit global warming below 2 degrees Celsius. McKibben calculated that number at 565 gigatons but warned that the proven reserves held by the world's oil companies would emit nearly 2,800 gigatons of CO2. The "Do the Math" effort is urging universities, pension funds and other large investors to divest their interests in oil companies as part of an effort to keep most of that oil in the ground.

McKibben and his fellow activists gathered thousands of protesters to encircle the White House last year in a demonstration that elevated Keystone to a marquee fight in the effort to confront climate change.

"No one needs to get arrested this time -- though that may come as the winter wears on. For now we simply need to let the President know we haven't forgotten, and that our conviction hasn't cooled," McKibben and other green leaders wrote in an open letter to activists last night.

Environmentalists were not alone in elevating Keystone's prominence in a second Obama term. American Petroleum Institute President Jack Gerard pointed it out in his statement congratulating Obama on his re-election.

"We look forward to continuing our work with the president and helping him fulfill his campaign promise to increase domestic oil and natural gas production that will create American jobs and strengthen our economy. With both candidates supporting more development of America's vast oil and natural gas resources, energy is a big winner in this election," Gerard said.

"Right off the bat, the president can approve the Keystone Pipeline and put thousands of Americans to work immediately," he added.

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