Insiders: Southern Section of Keystone Pipeline Doesn’t Need Obama

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By Olga Belogolova
Updated: March 28, 2012 | 6:24 a.m.
March 27, 2012 | 9:30 p.m.

Standing at a podium in front of piles of pipes in Cushing, Okla., last week, President Obama unveiled an executive order meant to speed federal permitting of pipeline infrastructure, including the southern portion of the controversial Keystone XL oil pipeline. Critics immediately jumped on the move, accusing Obama of being “the rooster taking credit for the dawn” and arguing that no federal action is actually needed for that portion of the Keystone pipeline to move forward. National Journal’s Energy & Environment Insiders agree.

More than 70 percent of Insiders said that Obama’s executive order was unnecessary, with some even saying the move smacks of federal overreach.

Insiders overwhelmingly agreed that the southern portion of the Keystone XL pipeline, which will run from Cushing to refineries in Port Arthur, Texas, only needs local approval. States typically handle the siting of interstate oil pipelines, while the only federal involvement normally comes from the Federal Energy Regulatory Commission, the Army Corps of Engineers, and the U.S. Fish and Wildlife Service.

Obama’s involvement in the approval process is “not even remotely necessary,” said one Insider, arguing that Obama’s campaign likely thought it was “politically necessary to invent an executive action to [stanch] the coming decline in the polls.”

The Cushing campaign stop came just a day after Gallup released a poll showing that nearly 60 percent of Americans think the U.S. government should approve the entire Keystone project, which Obama rejected in late January.

“The Cushing event was all show … but a well-executed one,” said another Insider.

Still, by rejecting the permit for the full pipeline—which would run from Canada to the Gulf Coast—and then going full-force in supporting the southern section of the pipeline, Obama is sending out inconsistent messages to the public, Insiders said.

“This is a local permitting decision. The president getting involved looks like federal government interfering in the traditionally local decision of land-use planning—and it likely won’t actually change the permitting process, which is already under way,” said one Insider. “Not great optics—and I say this as a fan of the president.”

Even some of the 29 percent of Insiders who said the Obama administration should be involved argued that it is not legally necessary but noted that it is politically important.

“It is necessary in a political sense, to demonstrate that the administration is doing everything it can to lower high gas prices,” said one Insider. “But even without the administration’s involvement, the southern portion of Keystone will get built and, shockingly, gas prices will remain high.”

Insiders overwhelmingly agreed that the southern portion of the pipeline won’t do much for oil prices. Asked whether prices will go up or down once this piece of the pipeline is completed, 75 percent of Insiders chose “neither,” a mere 14 percent said prices would go down, and 11 percent said they would go up.

“You need to connect the hose to the spigot if you want to water the lawn,” one Insider said, arguing that only the approval of the full Keystone XL pipeline project would affect prices.

Insiders said that aside from some efficiencies in delivery, this portion of the pipeline won’t have much of an impact.

“It will only have an impact on the price of oil if investors see the construction as a sign of things to come in terms of fostering more domestic development,” said one Insider.

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Posted on March 28, 2012, in Economic policy, Energy, Insiders, Oil, Political economy, Progressive Agenda and tagged , , , , , , , , , , , , , , . Bookmark the permalink. Comments Off on Insiders: Southern Section of Keystone Pipeline Doesn’t Need Obama.

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