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Keystone XL: More about the politics than the petroleum

News Articles Featured | Globe and Mail | October 05, 2011

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For months, the stars seemed pretty well aligned for the Keystone XL pipeline, the proposed $7-billion megaproject that would carry oil-sands crude from Alberta to refineries on the Gulf of Mexico coast in Texas.

Though the U.S. State Department has seemed at times to drag its feet, all the arrows had been pointing in the direction of a resounding “yes.” Secretary of State Hillary Clinton showed her cards by declaring herself “inclined” to support it. Five of the six governors through whose states the 2,700-kilometre conduit would run were on board. And a country dying for jobs had a whopper of a shovel-ready project.Then, a little thing called politics reared its head.

Proponents of the TransCanada Corp. project, which would double the amount of Alberta crude flowing south, now fear that President Barack Obama will give in to pressure from the base of the Democratic Party to nix the pipeline.

With Mr. Obama’s approval rating sliding to a record low – leading more than half of Americans to think for the first time that he will be a one-term President – the White House needs to bring every stray Democrat it can find back into the fold before the 2012 election.

The progressive wing of the Democratic Party has been feeling particularly unloved by this White House. Killing the Keystone XL project would be a powerful way for the administration to show its renewed affection.

After weeks of watching a star-studded coalition of anti-pipeline forces steal the media spotlight, however, a group of Keystone proponents in Congress is now pushing back hard against the project’s foes.

The result is a full-blown public relations war that promises to heighten the political sensitivity of the pipeline, and oil-sands crude in general, as the administration prepares to make a final decision by year-end.

“The longer this takes, the more dangerous it becomes for this [project] to fall apart,” South Carolina Republican Senator Lindsey Graham warned Wednesday after a pro-pipeline pow-wow near Capitol Hill.

If the Obama administration rejects the pipeline, Mr. Graham vowed, “it will be a defining issue in 2012.”

Indeed, the White House itself may try to make it one.

Mr. Obama has adopted a more populist and stridently progressive tone in recent weeks as he moves to rally the Democratic base for the electoral battle at hand. But the progressive movement has laid down its conditions for backing Mr. Obama – and killing Keystone is a big one.

Environmentalists are smarting after the release this week of e-mails between State Department officials and TransCanada’s Washington lobbyist suggesting an agency bias in favour of the pipeline.

The lobbyist, Paul Elliott, was Ms. Clinton’s deputy national campaign director when she ran for the Democratic presidential nomination in 2008. In one e-mail from Marja Verloop, an official in the U.S. embassy in Ottawa, Ms. Verloop declares: “Go Paul!”

“Clearly, these guys are on the same team,” Bill McKibben, a Vermont environmentalist who organized anti-Keystone protests outside the White House, wrote in a New York Times op-ed on Tuesday.

The sudden politicization of the Keystone XL project has alarmed its oil industry backers, leading the Canadian Association of Petroleum Producers to hire former U.S. ambassador David Wilkins to help make its case to the administration and lawmakers on Capitol Hill.

The choice of the uber-connected Mr. Wilkins, a former Republican speaker of the South Carolina House of Representatives, brought with it a ready army of arm-twisters in Congress.

Six of the seven members of South Carolina’s congressional delegation showed up for the “energy roundtable” Mr. Wilkins organized over breakfast on Wednesday.

Mr. Graham led the charge.

The administration’s failure to approve the Keystone XL project “would be one of the biggest energy policy blunders in our history,” he warned, adding it would jeopardize Canada-U.S. relations.

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