Bloomberg News

Obama Can Remove Pipeline From Politics by Moving Faster: View

November 25, 2011

Nov. 16 (Bloomberg) -- President Barack Obama is being accused of playing political games in delaying the construction of a major new oil pipeline across U.S. soil. He should take this as an opportunity to prove that he cares more about the economy than about appearances.

The project is TransCanada Corp.’s Keystone XL pipeline, which would carry Canadian tar-sands crude through the Great Plains to the Gulf of Mexico. The State Department has said it needs an extra 14 months to decide whether to allow the pipeline, creating speculation that Obama wants to bury a contentious environmental issue until after the presidential election, to avoid scaring off campaign donors.

In truth, there’s a practical reason to delay the deal: The Nebraska Legislature and Governor Dave Heineman were prepared to block it. Their concern has been that even small spills from the proposed pipeline -- of the kind any pipeline is expected to have -- might contaminate wetlands and other sensitive ecosystems in the Sandhills region, where the vast Ogallala Aquifer is close to the surface.

Nebraska’s lawmakers met in special session this month to work out a bill that would give their government power to approve the route of any new pipeline through the state -- authority it could use to prevent the Keystone XL pipeline from crossing the Sandhills. Although TransCanada had questioned the state’s right to block the route, Sandra Zellmer, a University of Nebraska law professor, maintains that the state has constitutional authority over its natural resources that’s not preempted by federal law.

In any case, it wouldn’t have made sense for the U.S. State Department, which has primary responsibility for approving the pipeline, to ignore or resist Nebraska’s efforts. Arranging for a delay to look for a route more acceptable to Nebraskans was the right move. This week, TransCanada told Nebraskans it would chart a course that doesn’t traverse the Sandhills.

What’s not entirely clear is why the delay should have to be so long. The State Department says it will take until the first quarter of 2013 to assess the environmental impact of a new path for the pipeline, because that’s “the time typically required for environmental reviews of similar scope by other agencies.” But TransCanada claims to have already investigated seven alternative routes that would avoid the Sandhills. Shouldn’t that make it possible to study the environmental impact of a detour relatively quickly?

Ultimately, as we have said before, the State Department should approve the Keystone XL pipeline. The U.S. would benefit from several thousand seasonal construction jobs, and from the business of refining the 700,000 barrels of oil a day that would flow through its territory to the Gulf Coast. Spills are a risk, as they are from the other 2.5 million miles of energy-related pipelines in the U.S. But as Bloomberg Government recently reported, the magnitude of a pipeline oil spill is generally far less than that from an offshore well (as occurred in the Deepwater Horizon accident), because operators can stop the flow of oil to the section of pipeline that’s leaking.

Yes, getting tar-sands crude out of the ground creates more greenhouse-gas emissions than ordinary oil drilling does, but extraction methods are getting cleaner all the time. Canada must account for the extra emissions in its national efforts to limit the release of greenhouse gases. The State Department’s job is simply to ensure the safety of the pipeline running through the U.S.

The Obama administration can do this -- and also demonstrate an intention to put this project above politics -- by speeding up the work of evaluating a new route.

--Editors: Mary Duenwald, Mark Whitehouse

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To contact the Bloomberg View editorial board: view@bloomberg.net.


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