Keystone Politics

http://online.wsj.com/article/SB10001424052970204653604577249722036131042.html?mod=WSJ_Opinion_AboveLEFTTop

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"People will never attain what they cannot see themselves doing" (Karen Ford)

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So yesterday TransCanada announced that it plans to break up the ($7.6 billion) Keystone XL pipeline project into several stand-alone parts, beginning immediately with a leg connecting Cushing, Oklahoma with the Gulf Coast.

The original plan was to connect U.S. refiners with Alberta oil sands crude and other Canadian and U.S. resources. But to satisfy the environmental lobby, President Obama's State Department refused to issue the cross-border permits last month.

This is odd since the State Department "studied" the Keystone XL proposal for 3 years (2008 thru 2011). Over that period, the State Department asked for 59 different changes to the proposal, all of which Keystone agreed to (these were not small changes: one change was to bury the pipeline 4 feet underground for it's entire length!).

This new side project will alleviate some of the bottlenecks around Cushing, but it doesn't do anything to get oil from Canada to the U.S. which is the main point of the pipeline.

President Obama welcomed the news: "we support the company's interest in proceeding with this project." The Wall Street Journal's interpretation of this is that President Obama is simultaneously opposing and supporting Keystone XL. Cross border permits: NO. New pipeline inside the U.S. border: YES.

What makes Keystone XL not work crossing the border but OK inside the U.S.?

This new section from Cushing to the Gulf will create jobs and improve system efficiency but it is also true that it does not need State Department or Presidential approval because it is not crossing a "border." Frankly, if I were Keystone and I had an off the record agreement with President Obama's staff that he OKs the cross border portion of the pipeline after the election, I'd start it now. What's the difference? You can't build a 1700 mile pipeline all at once anyway.

We'll see.