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Workers wearing anti-OPEC shirts listen during the U.S. State Department's open hearing for the proposed Keystone XL Pipeline at the Port Arthur Civic Center in Port Arthur, Texas, Monday, Sept. 26, 2011. (Guiseppe Barranco/AP)
Workers wearing anti-OPEC shirts listen during the U.S. State Department's open hearing for the proposed Keystone XL Pipeline at the Port Arthur Civic Center in Port Arthur, Texas, Monday, Sept. 26, 2011. (Guiseppe Barranco/AP)

pipeline

Keystone XL: More about the politics than the petroleum Add to ...

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.

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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.

“If this deal fails, it will be a turning point in the relationship between our countries for no higher purpose.”

Mr. Graham rejected environmentalist claims of “dirty oil” from the oil sands, which he toured in 2009, and described their footprint “in this vast region of Canada” as “microscopic.”

“Dirty oil is buying oil from someone who takes the money and sponsors terrorism and tries to make the world a dark, sinister place,” the outspoken second-term senator insisted.

While environmentalists consider stopping the Keystone project crucial to their broader goal of preventing oil-sands expansion, Mr. Graham countered that China would just step in to buy additional Alberta output.

Though Mr. Graham called the Keystone XL project “universally accepted” by Republicans, there are in fact several in the GOP who oppose it. Most hail from Nebraska, where the pipeline would run through the Ogallala Aquifer. They fear damaging oil leaks in the agriculture-dependent state.

But if not all Republicans support the project, not all Democrats are against it, either. Several dozen in the House voted for a resolution calling on the Obama administration to decide on the project by Nov. 1.

No Democrat is as vocal in his support of Keystone as Gene Green, whose Houston district is home to five oil refineries that are hankering for new supplies of heavy crude.

“I’m an energy Democrat,” Mr. Green said at Wednesday’s event. “I’m a minority in my own party. There are some in our party on the east and west coasts who are not dealing with reality.”

Mr. Green, like Mr. Graham, continues to advocate for climate-change legislation that would kick-start the transition to a low-carbon economy. But both insist oil will dominate U.S. energy consumption for decades to come.

“This is a huge opportunity for America to add to our supply of oil coming from a friend, not an enemy,” Mr. Graham said. “It is a national security imperative.”

For a beleaguered Mr. Obama, however, killing the Keystone may become a political imperative.





Some of the key people and institutions on either side of the fight over the Keystone XL pipeline

FOR

- The U.S. Chamber of Commerce is lobbying in the seven Midwestern states most affected by the project.

- The American Petroleum Institute is working the hall of Congress, and town hall. The oil-industry association recently helped bus 150 pipeline supporters to a community meeting in Atkinson, Neb., population 1,300.

- Senators Lindsey Graham (R-S.C.), Tom Coburn (R-Okla.) and James Inhofe (R-Okla.); U.S. Representative Gene Green (D-Tex.); Governors Brian Schweitzer (D-Mont.), Dennis Daugaard (R- S.D.), Sam Brownback (R-Kan)., Mary Fallin (R-Okla.) and Rick Perry (R-Tex.) are among the U.S. politicians on board.

AGAINST

- Friends of the Earth joined other green groups in launching a lawsuit Wednesday against the U.S. government to stop the clearing of grasslands and other work in preparation for the pipeline.

- Other activist groups, such as Greenpeace USA and the Native American Rights Fund, have lobbied politicians and organized protests.

- The New York Times has written editorials against the pipeline, and has been investigating the efforts to have it built.

- Senators Bernie Sanders (I-Vt.) and Mike Johanns (R-Neb.); U.S. Representatives Henry Waxman (D-Calif.) and Dennis Kucinich (D-Ohio); and Governor Dave Heineman (R-Neb.) are among the U.S. politicians opposed.

- Robert Redford, Kyra Sedgwick, Daryl Hannah and Margot Kidder are among the celebrities who’ve joined protests or spoken out.

- Archbishop Desmond Tutu, the Dalai Lama and seven other Nobel laureates wrote a letter to U.S. President Barack Obama asking him to reject the project and focus instead on renewable energy.

Follow on Twitter: @konradyakabuski

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