11 November 2011

This is What Victory Looks Like

The Obama Administration has put off a decision on the Keystone XL pipeline until immediately after the 2012 election.  At that point a newly elected Republican president will be able to quickly approve it or President Obama can do the same without concern for an upcoming election.

Bill McKibben, leader of the pipeline opposition, writes:
[T]he President sent the pipeline back to the State Department for a thorough re-review, which most analysts are saying will effectively kill the project. The president explicitly noted climate change, along with the pipeline route, as one of the factors that a new review would need to assess. There’s no way, with an honest review, that a pipeline that helps speed the tapping of the world’s second-largest pool of carbon can pass environmental muster.
Kill the project?  Here is what the State Department actually says (emphasis added):
Since 2008, the Department has been conducting a transparent, thorough and rigorous review of TransCanada’s application for the proposed Keystone XL Pipeline project. As a result of this process, particularly given the concentration of concerns regarding the environmental sensitivities of the current proposed route through the Sand Hills area of Nebraska, the Department has determined it needs to undertake an in-depth assessment of potential alternative routes in Nebraska.
A revised pipeline routing around the Sand Hills (where few people live anyway) will easily deal with this issue and fulfill the State Department's re-review. In calling for the delay, Obama has deftly turned opposition from among his base into a key asset. If he loses the election he can always blame his base for not doing enough and if he wins, he will have the mandate to do what is in the best interest of the country, not just his base.  Almost Clintonesque in its political brilliance and simplicity.

To wit -- McKibben now says:
The President deserves thanks for making this call -- it’s not easy in the face of the fossil fuel industry and its endless reserves of cash.
And follows it up with an empty threat that perhaps reveals more than intended:
Some in our movement will say that this decision is just politics as usual: that the President wants us off the streets -- and off his front lawn -- until after the election, at which point the administration can approve the pipeline, alienating its supporters without electoral consequence. The president should know that If this pipeline proposal somehow reemerges from the review process we will use every tool at our disposal to keep it from ever being built; if there’s a lesson of the last few months, both in our work and in the Occupy encampments around the world, it’s that sometimes we have to put our bodies on the line.
Let's return to this February, 2013 and see if "victory" still smells as sweet -- when plans re-emerge for crude oil flowing south, regardless of who wins the election.


  1. I don't think it's going to help him that much. With oil prices spiking next summer (WTI has been creeping up for a couple of months now) he's going to be vulnerable with independents on his energy policies, or rather lack thereof.

    Michael Levi has an excellent piece in today's NYT; the main thrust is that this is a Pyrhhic victory for environmentalists. Cleaner energy policies will require a lot of interstate projects, and rewarding the sort of hysterical NIMBYism we saw here in Nebraska will make those projects harder to implement. And finally, what does it say about a country that a major energy project will now go five years without a decision about whether it can even start. Would you want to invest capital under those circumstances?

  2. -1-Gerard Harbison

    Thanks ... I'm not sure it helps much either, except as it certainly removes a potential hurt. Levi's logic is sound, but since when have political campaigners (on any topic) expressed consistent arguments across cases?

  3. Whoa. The Occupy hellholes are a success?!!! Who knew? What success have they brought? Other than disgusting middle America with the trash, squalor, sexual assaults, crime, foul mouths, defecating and urinating in public and on shop floors and the like?

  4. I think you layed out what will happen quite well.

    'Real Politics' is 3 dimensional Vulcan chess in a darkened room.

    Absent a viable 'substitute' good the oil is going to flow across the border. By pipeline, or rail, or 'undocumented workers' carrying it across in buckets.

  5. Since we're on the subject of the Iron Law of Climate Policy and what will happen in February, 2013, is there any interest in posting on Australia's $23.50/ton carbon tax levied on the nation's top 500 emitters, which was passed this week?

  6. -5-sojournment

    Thanks ... I've posted a lot on the topic and will do so again I am sure, for now just search "australia" or "gillard" for those past posts ...

  7. This all sounds like rationalization from the likes of McKibben.

    My take is that Obama didn't want to make a hard decision, so he voted present, as he did so often during his legislative career. I suspect his analysis is probably similar to Roger's first paragraph.

    Politically, I think approving it would have been better for him. He could plausibly argue that he was doing things to try to help the economy. The cost would have been to the enthusiasm of the base, but I suspect that having this arrow in his quiver would be a bigger asset in the general election. The postponement hasn't neutralized the issue, which the Republican nominee will surely use against Obama.

  8. Thank you. Apart from your assessment of the effectiveness of the proposed policy on decarbonization, what is your assessment of the politics of passage vis-a-vis the iron law?

    After running your search, for example, I read the following article: http://www.abc.net.au/unleashed/45810.html

    Do you believe that Gillard followed your suggested strategy and it proved successful, or something else? Is there any take-away for advocates of carbon pricing to use the Iron Law to their advantage?

  9. -8-sojournment

    No, Gillard did not follow my advice ;-)

    My sense is that the carbon tax is on precarious political ground as the opposition has made it a central plank in their platform, and Gillard/Labor remains deeply unpopular. Would Rudd turn the ship? Maybe.

    The tax will be sustainable if people think they are benefiting. Such benefits could be crassly economic:


    But for the first years at least the carbon tax is subsidized in the the sense that more will be paid out to the public than is taken in. the public likes such policies until the bill comes due (see, Greece, Italy ...).

    So the real test of the carbon tax will be when it starts to bite. Regardless, I do not expect to see any acceleration in Autralia's decarbonization rate over the next 5 years. We shall see ...

  10. "Obama has deftly turned opposition from among his base into a key asset."

    for sure . . just as he threw the AFC-CIO and all those Steelworkers jobs under his "Me keeping my job is much more important than you having a job" program.

    But then this is just another way Obama shows leadership by voting Present.

  11. -9-Roger Pielke, Jr.

    I do not expect to see any acceleration in Australia's decarbonization rate over the next 5 years.

    Hydro-Quebec and Bonneville Power Administration both offer power to Aluminum smelters at around 3-4 cents/KWh which is the price Australian utilities where offering power to Aluminum smelters.

    Rio-tinto is already looking to dump it's Australian Aluminum operations because they are 'under performing'.

    Another round of 'musical aluminum smelters' seems likely.

  12. Obama fully plans to kill the pipeline come 2013 if he wins re-election. He can't afford to kill it now, it would potentially cost him to many independent votes. Whether this "delay" tactic helps him get re-elected or not depends on the price of oil next summer. If the price of gasoline is close to or exceeds $5/gallon he will lose in a landslide as the republican nominee will hammer him on his poor leadership and refusal to pursue policies that will help reduce US dependence on mideast oil and create domestic jobs. On the otherhand, if gas stays under $4 per gallon, the short-sighted, gullible independents will be hoodwinked and may help Obama squeeze out a re-election.

  13. Given that Obama did nothing for the Latino base on immigration, and dragged his feet on DADT so long that his gay base lost a lot of enthusiasm, he had to give someone something.

  14. #12 alcheson ,

    Obama fully plans to kill the pipeline come 2013 if he wins re-election

    The pipeline is supposed to carry 510,000 barrels of oil per day.

    A single train can carry 70,000 barrels of oil.

    Whether or not Obama kills the pipeline only impacts whether or not the oil will be carried by pipeline or rail and the people who had hoped to get a job building the pipeline.

  15. If Obama wins re-election the chances of rational choices for energy policy will vanish.
    The pipeline will be dead.
    Warren Buffet, who owns large interests in rail transport and is increasingly political opposes the pipeline.
    Big Environmentalism does not care that trains derail far more than pipelines leak.
    Big Environmentalism does not care that pipelines use much less energy to move oil than trains.
    Big environmentalism does not care about the noise pollution of trains.
    We are not likely to have the XL pipeline.


  16. Mickey Kaus (Obama voter):
    Left types at Occupy Wall Street protest income inequality. Left types in the MSM turn out lots of articles on income inequality. Politico notices there are lots of articles on income inequality and concludes that ”Occupy Wall Street is winning.” Huh? …


    Having concluded that they won the argument, they will be outraged when the election results do not conform to their view of the world. This will lead to accusations of how the evil corporatist rich bought the elections.

    Sounds like a rerun of cap and trade.

  17. Re delaying decisions for political reasons during the presidential election campaign. Shouldn’t we ask: “Where is the outrage.” The plan for the Keystone pipeline is in the best interest of our national energy security and helps to deemphasizes imports from distant offshore especially the Middle East and associated wealth transfer involved when the country is still struggling to get traction in the economic recovery. The plan and assoc. feasibility study need to be completed and the project implemented in a way that satisfactorily addresses any risks. Delaying until after the 2012 election is clearly political and nothing else. Arguments based on reducing the carbon footprint to help mitigate global warming are false statements and “not even dumb.” As any thinking (and not politically and ideologically driven, which are different things) person knows the Canadian oil will be recovered, sold and exported, to someone most likely China and India. Furthermore, the U.S. will replace the Canadian oil with imports from elsewhere namely the Middle East. Therefore this President’s not approving any plan is a purely political move and anti U.S. oil company - production from nearby sources to U.S. final markets. U.S. imports from FSU, ME and Africa in 2010 represent > $120 billion and > a quarter of total U.S. imports which is a pure wealth transfer outside the region not in our strategic interest.

  18. -17-Danley Wolfe

    Thanks for the comment ... _all_ decisions made by governments are "political" -- Can you come up with a criticism of the substance of the decision rather that its "political" nature? Thanks!

  19. Roger - my point was that others will be ready / already are ready to jump in line to commit to the Canadian oil and deferring a decision would risk losing the opportunity; however, it would not reduce U.S. imports which would continue to come from such places as the FSU, Middle East and North Africa. That would: 1) increase energy security risk rel to petroleum imports, but 2) would not contribute to decarbonization (which teh President has said is another objective in this case) -- as the U.S. will continue to import oil for many years. My reference to "politics" is not just rel. to taking sides or picking winners but in the actual act of putting decisions aside until after the election so that it would not raise issues with constituencies on the far left. But as you point out politics are always a part of making policy decisions, but comes in a variety of flavors. Cheers.

  20. Funny that out here in the industry itself here in Western Canada, what we're hearing is that China may be allowed to invest directly in Canadian oil production. Its something they've been after for decades now and finally that is now a choice Canadians out West can live with. There's even speak of joint venture refining in China.

  21. The fecklessness of Obama in allowing the Gulf/ Caribbean region and now Canada to be opened up to China and Russia, while hindering US production of the safe oil close at hand is monumental.
    From pipelines to playing slow ballwith drilling permits to kow towing to big green, Obama shows no care for American interests and cannot wait to indulge the worst enviro extremists.