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January 29, 2013
Obama, climate change, and Keystone

Is there a connection between President Obama’s surprisingly strong emphasis in his inaugural address on responding to the human contribution to climate change and a State Department announcement the following day that the administration’s decision on permitting the Keystone XL pipeline has been delayed?

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“We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations,” said the president.  “Some may still deny the overwhelming judgment of science, but none can avoid the devastating impact of raging fires, and crippling drought, and more powerful storms. The path towards sustainable energy sources will be long and sometimes difficult. But America cannot resist this transition.  We must lead it.”

Will president lead?

That was an unexpected commitment, given that during the latter part of the president’s first term, the White House generally left it to the EPA, Department of Transportation, Department of Energy, and other agencies to address emissions of GHGs and energy efficiency in a piecemeal fashion.  Yet after making climate change a key component of his second-term start-up, the president was put into the position of responding to the governor of Nebraska’s announcement that he had approved the revised route of the Keystone pipeline through the state. 

Previously, the State Department, which must issue the Presidential Permit necessary to begin construction of the pipeline in the United States, indicated that it would reach a decision on the permit by the first quarter of 2013.  But in the Department’s daily press briefing, spokesperson Victoria Nuland said the process will likely take longer.  Nuland said that Nebraska’s positive decision will be taken into consideration in the State Department’s review, but she did not indicate that that decision is a factor in prolonging the federal process. 

Energy-intensive

Environmentalists have long claimed that extracting oil from the over 140,000 square kilometers of oil sand fields in Alberta, Canada, is an energy-intensive process that would generate three to four times more GHGs than conventional oil recovery.  According to the EPA, the Keystone project has the potential to increase carbon dioxide emissions by 27 million metric tons, which is equivalent to seven coal-fired power plants operating continuously or having 6.2 million cars on the road for 50 years.  Given those prospects, approval of the Keystone project so soon after the president’s new commitment would throw his administration into a new policy fight with some of his strongest supporters.

Nebraska’s economy

On the other hand, denial of a permit for the pipeline would leave the administration vulnerable to claims that it is suppressing economic growth.  In his letter to the president announcing the state’s approval of the new pipeline route, Nebraska’s Governor Dave Heineman noted that construction would result in $418 million in economic benefits, $16.5 million in use taxes from pipeline construction materials, and annual local property tax revenues between $11 million and $13 million for the first full year of valuation.  The letter also indicates that earlier environmental concerns, such as the impact of the pipeline on a critical aquifer and fragile soils as well as responsibility for cleaning up spills, have been resolved with TransCanada, the pipeline company. 

TransCanada has noted that even if its permit to ship Alberta’s oil via pipeline into the United States is denied, the fields will still be developed and GHG releases will occur.  The question now is whether any new administration policy will leave room for the U.S. to share responsibility for those activities and releases. 

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