With due respect to the vociferous anti-oil campaigners who have opposed the Keystone XL pipeline, the price of oil was the deciding factor in shelving temporarily the giant project.
And we predict that it will be resurrected even if the extreme environmentalist lobby continues to oppose major new energy projects.
Officially, the pipeline project is not dead. The company, TransCanada, asked the U.S. State Department to suspend its latest review of the project. The State Department is involved because the pipeline would carry Canadian oil to Gulf of Mexico refineries.
Because State is involved through that technicality, President Barack Obama has used State reviews to shamefully stall the project as a sop to the anti-oil environmentalists.
The company is not in a very good position here: The president has said that he plans to rule on the project before leaving office, and the betting is he’ll come down against it.
But the official reason sought for suspending State action is that the company seeks review of its route, again, from the Nebraska Public Service Commission. That would take months or even a year, pushing approval of the pipeline into the next presidential administration. The company had earlier criticized such a process as a needless delay; now, they seek delay until Obama is out of office.
We doubt that the president is going to fall for this ploy, but Obama’s formal rejection at some future date has less to do with the future than his backers believe because the future of today’s economy is not in nontraditional energy sources.
The price of oil makes the Keystone XL project more difficult today, but one day, the price of oil will rebound. Just as naturally, economic growth — despite wonderful advances in energy conservation — will require much larger volumes of oil and gas.
Then, there will be a Keystone XL pipeline or something like it, providing thousands of construction jobs when that time comes.
Even if the next president is Hillary Clinton. We say that because Clinton’s newfound opposition to Keystone was based on opposition to her from the Democratic left. But in office, should she be elected, she will find that the nation’s energy appetite cannot be filled with non-petroleum sources. It’s almost tailor-made to be a Clintonian flip-flop of 2020.
However, the Keystone XL project has been stalled for seven years already. That it is still being fought over in this way is an ugly example of politics on the part of Obama.