The Keystone XL pipeline has explosively become a proxy for two separate debates: one on the environmental implications of developing the Canadian tar sands and another on American energy production and security. Both of these debates will become even more charged throughout the 2012 election campaign, especially given the prospect of $4 / gallon gasoline this summer, as both parties seek maximum advantage in the debates over jobs and energy. Today's GR Energy and Climate Brief explores the confluence of factors underlying the Keystone XL pipeline controversy.

As the politics heat up around the Keystone XL pipeline, just today touted by US Chamber of Commerce President Tom Donohue as essential to American job creation, there is a real risk that jurisdictional issues are emerging that could end up delaying the project in courts. Today's GR Energy and Climate Brief explores the Obama Administration's Keystone strategy, the consequences of Congressional efforts to push the project forward, and the potential unintended consequences of election year politics on a project that enjoys broad bipartisan support.

The Obama Administration Quietly Pushes Forward: The Obama Administration's decision in November 2011 to punt a final call on the Keystone XL pipeline until after the 2012 election was a political calculation to avoid alienating its environmentalist base, not a reflection of a shift in position. If anything, energy security and domestic resources are rising as priorities within the White House and the project still enjoys broad support. The most recent indication came from Obama's own Council on Jobs and Competitiveness, which just last week issued a report calling for job creation through expanded domestic energy production, including an approval of the Keystone project. The State Department, which has primary responsibility for projects that cross national borders, is still working behind the scenes with TransCanada to move the project forward. According to sources at State, they are seeking to reach an agreement that would include environmental conditions and a route that does not go through Nebraska’s Sandhills. While State does not anticipate quick action from Congress, they are working to anticipate any action so that they are in a position to quickly move forward if a deal does get done.

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