5 Ways The Keystone Saga Could End

 

A veto could doom the congressional push for Keystone, since Republicans lack the votes for an override. But the White House and State Department still must decide the larger question of whether to allow construction of the $8 billion Canada-to-Texas heavy-oil pipeline, and that means both supporters and opponents will be making a final push in a lobbying feud that has already devoured years and tens of millions of dollars.

 

Most likely, the Keystone endgame will play out in one of five ways:

 

After the veto, it may take weeks or even months for the administration to render its final verdict on a permit for Keystone, after six years of a State Department analysis that has already seen repeated politically opportune delays. That analysis is now in the final stages, as the department weighs whether building the pipeline’s 1,179-mile northern leg would be in the national interest — a broad question that includes Keystone’s economic and geopolitical impact as well as its effect on the Earth’s climate.

 

Obama has never said whether he favors or opposes the pipeline, but he has spent months scoffing at GOP arguments that Keystone would bring many economic benefits to a U.S. awash in domestic oil. So that makes environmentalists — who view the carbon-intensive oil industry in western Canada’s “tar sands” region as a disaster for the climate — increasingly confident that Obama will side with them in the end.

 

The White House’s main objection to Congress’ Keystone bill is that it would upend more than a decade of precedent by taking the approval decision out of the executive branch’s hands. But in recent months, Obama “has shifted his tone from making the procedural argument against Keystone to making the substantive argument against it,” said Karthik Ganapathy, spokesman for the green group 350.org. At this point, Ganapathy said, “it’s very hard to backtrack from

that.”

 

It’s not entirely clear when or even how the administration will announce its decision on the permit, although Obama has said he plans to make the final call. The State Department is also supposed to issue a “determination” on the national interest question, which could come out before or at the same time as Obama’s verdict.

 

Obama’s record is riddled with moments of giving to greens with one hand and taking away with the other. So don’t be shocked if he vetoes the bill only to approve the pipeline weeks or months later.

 

There’s some precedent for this: In late 2011, the administration blindsided green groups and Obama’s own Environmental Protection Agency by killing a proposed ozone pollution rule at the last minute — only to thrill liberals by postponing its decision on Keystone a few months later. Just last month, the administration gave greens a win by prohibiting oil wells on millions of acres in Alaska’s Arctic National Wildlife Refuge, only to whack them 48 hours later by proposing to allow drilling off much of the Atlantic Coast.

 

In that spirit, Obama may well bolster environmentalists’ hopes by vetoing a Keystone bill this week, then dash them by giving TransCanada a permit to build the pipeline. The economic case for building Keystone may have dimmed in recent months, thanks to falling oil prices, but the State Department still has put out five environmental studies concluding that Keystone would probably cause little ecological harm. So the president would have some scientific cover if he decides to OK a project that has big support from pro-Democratic labor unions and close U.S. ally Canada.

 

More than four years ago, then-Secretary of State Hillary Clinton played a major role in making Keystone a household name by saying her department was “inclined to” sign off on the pipeline. Greens responded by going to battle against the State Department, accusing it of letting the oil industry influence its review process, and Clinton still faces pressure from top Democratic donors to speak out on Keystone before launching her 2016 presidential campaign.

So the last thing she should want is for Obama to let the decision drift well past Memorial Day. Yet a new delay is not out of the question.

 

The second possibility of a new punt on Keystone comes on the familiar ground of Nebraska, where landowners and anti-pipeline activists have twice forced the federal process to a halt. TransCanada took the first steps toward invoking eminent domain last month against some holdouts who own land in the pipeline’s path, but those cases are now stalled while lawyers opposed to the pipeline press for the Nebraska Supreme Court to hear their arguments.

If that sounds familiar, it’s because the same state court turned back a previous challenge to Keystone’s route just last month. That lawsuit had prompted the State Department to halt its review of the pipeline last spring.

 

A surprise deal with Canada could be one way out of Obama’s jobs-versus-climate box on Keystone.

 

Pundits have speculated for years — without much evidence — that Obama might “trade” Keystone for another desirable item, from a GOP cease-fire against EPA to a new highway bill to measures the White House doesn’t even endorse, such as a carbon tax. But the president pointed a year and a half ago to one thing he could want before approving the pipeline: a stronger commitment from Canada to cutting greenhouse gases.

 

 “I’m going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere,” Obama told The New York Times in August 2013 when asked about Keystone. “And there is no doubt that Canada at the source in those tar sands could potentially be doing more to mitigate carbon release.”

 

To date, however, Canadian Prime Minister Stephen Harper hasn’t made any public offers.

Pipeline backers like to note that Keystone’s starting point, the oil-rich province of Alberta, already has a carbon fee that gives the industry an incentive to lessen its pollution. But few environmentalists or oilmen believe Obama would be satisfied with Alberta-only action.

With United Nations climate talks in Paris less than a year away, Obama could cause a global splash by getting Canada’s Conservative government to commit to binding carbon cuts — even if the price is approving Keystone. The chances of Canada agreeing to any such deal without corresponding constraints on U.S. oil companies remain slim, but not zero.

 

Obama has the power to speed up the molasses-slow Keystone process, and this week’s veto would offer an opportunity to seize the momentum from a GOP that has battered him on the issue for years. So why wouldn’t the president capitalize on the moment by burying Keystone for good — perhaps even on the same day that he whips out his veto pen?

Florida Gov. Rick Scott, second from right, and Texas Gov. Rick Perry, right, speak with volunteers at a phone bank on election day, Tuesday, Nov. 4, 2014, in Miami. Scott is running against Democratic gubernatorial candidate Charlie Crist ,a former Republican Florida governor.

 

This prospect has stoked speculation among Republicans and environmentalists for weeks. It’s among the less likely outcomes given the legal hurdles that the State Department faces in crafting airtight reasoning for its final Keystone recommendation, but both George W. Bush and Bill Clinton sometimes used vetoes to amplify their public statements on issues like stem cell research or abortion.

 

The League of Conservation Voters on Monday handed Obama fodder for a quick rejection of the pipeline in a poll that found almost seven in 10 voters want Congress to move on from Keystone. Those voters agreed with a statement that “the Republicans in Congress are wasting time by putting so much focus on the Keystone XL pipeline when there are so many more important things they could be doing to help the country.”

ELANA SCHOR is an energy reporter for POLITICO where this story originally published. It is reprinted here with complete permission from POLITICO.