Steve A. Yetiv is the Louis I. Jaffe Professor of International Relations at Old Dominion University and author of The Petroleum Triangle (Cornell University Press, 2011) and Myths of the Oil Boom (Oxford University Press, forthcoming). Jesse R. Richman is associate professor of political science and director of the Social Science Research Center at ODU.
The Republican victory in the midterm elections has shaken up politics in the United States. It may even lead to a decision on the controversial Keystone XL pipeline, which would move oil from Alberta's tar sands and North Dakota's Bakken oil fields to refineries on the U.S. Gulf Coast.
Will it clear the way for construction of the last phase of the pipeline? The chances have risen, but passage is still not assured. It will likely depend on a deal between the Republican-dominated Congress and Democratic President Barack Obama.
U.S. domestic debate on Keystone XL is complex, but in essence, it pits those who argue that the pipeline will create American jobs and boost North American energy independence against those who see it worsening environmental problems, such as climate change. Often absent from the discussion is the international diplomatic dimensions, including U.S.-Canadian relations. Particularly after the midterms, the White House and many in Congress appear to be on opposite ends of this debate.
Congress is much more likely to put pipeline jobs above environmental concerns. The Republicans have long advocated expedited approval of Keystone XL. The pipeline is popular with the public, supported by more than 60 per cent of respondents in recent polls. And job creation often does more than environmental advocacy to boost re-election chances, at least in specific districts and states.
In sharp contrast, Mr. Obama's administration has taken tougher positions on environmental issues than any other administration in recent memory. The President, who is surely thinking about his legacy, wants to be viewed as an environmental president. Witness the recent U.S.-China agreement to address climate change. It helps solidify Mr. Obama's legacy on the environment but may clash in spirit with signing off on Keystone, although it gives him some political cover to do so if he wishes.
Signing off on Keystone runs against Mr. Obama's gut feelings and environmental legacy, although he appears split on the matter politically. So far, he has delayed on the pipeline for six years, repeatedly ordering reviews of it by the State Department. Since the midterms, he has re-emphasized the need for an extended review process to play out without interference, and suggested that he would weigh "parameters" such as the benefits for Americans and whether it will worsen climate change.
Congress will now make a push for Keystone XL. Republicans have been its key champion and are emboldened by electoral victory. There is also talk that Senate Democrats may advance it in the lame-duck session. Once Congress passes legislation to accelerate approval, several scenarios are possible.
Mr. Obama's need to find some basis for co-operation with Congress makes it more likely that he will support the pipeline. He must also understand that if he takes a stand against the pipeline, it will cost him in co-operation from Republicans on other issues he holds dear. The Keystone XL bill will likely come packaged with "must pass" legislation. The political imperatives of Democratic Senator Mary Landrieu's impending runoff election might further sway Mr. Obama to support the pipeline if he's presented with a bill by Senate Democrats.
But even if Congress passes a Keystone XL bill, Mr. Obama could well veto it, despite the hit to his popularity and the risk of damaging relations with Canada, where Keystone is a hot-button national issue. While the pipeline has the support of more than 60 senators, it lacks a veto-proof margin. For all the 2014 midterm elections have changed in Congress, the administration's position will change only if Mr. Obama wants it to. In 2012, the sense among some in Canada was that after re-election, Mr. Obama would advance Keystone. This sense seemed substantiated by American diplomats. But the prospect was dashed in 2013. Mr. Obama's personal views on the pipeline likely have not been changed by the midterms, and he might veto a Keystone bill on the grounds that administrative review processes should be respected.
The best prospect for a decision in Washington rests in a deal that provides the administration with offsetting environmental gains. If Congress gives the President something to allay environmentalists' concerns and protect his legacy as an environmental president, he will be more likely to advance the project. Although reaching such a bargain will be difficult in the poisoned U.S. political atmosphere, the midterms have made it much more likely.