It's been unquestioned conventional wisdom.
Eventually, everybody knows that the US State Dept. will approve the Keystone XL pipeline. It will take lots of crude coming out of Canada's oil sands on a journey down through Montana, South Dakota and Nebraska on its way to Cushing, Oklahoma. From there, a spur will open up a new route to bring the growing Cushing surpluses to the Gulf of Mexico. All the growing opposition will be ignored. Right?
Not so fast, says analyst Kevin Book.
The State Dept. announced earlier this week that it is seeking additional information in the Environmental Impact Statement that must be produced in connection with the review process. A decision on State's approval needed for a pipeline project that crosses international lines will be made by the end of the year, according to the department's announcement on its move.
Book, of Clearview Energy Partners, isn't buying conventional wisdom. The request for more data for an EIS "is yet another manifestation of the significant division among Obama administration advisors regarding imports of crude from Canada's oil sands," Book wrote in a report after the State Dept. announcement. "Simply put, if White House decision-makers predominantly favored the pipeline, the State Department probably would have approved it already."
The opposition to Keystone XL is not so much opposition to the line itself, but to what it is carrying. Environmentalists have targeted oil sands, and Keystone XL is a symbol of that production. Hence, the growing chorus of opposition to the project.
"In our view, odds for final approval remain below 50% unless gasoline prices remain elevated throughout the summer and, even then, not before the Administration exhausts other, less-politically-challenging tactical responses to voter concerns," the report said. Book's menu of political choices to avoid needing to say "yes" to TransCanada, the developer of Keystone XL, clearly shows that he believes the Obama administration may do things it might otherwise not like to do, solely so it can reject Keystone XL.
Those things include selling oil from the SPR faster than it would have needed to for maintenance; giving a thumbs up to wells delayed in the Gulf of Mexico by the moratorium/permitorium; and fast-tracking an EIS for the Gulf of Mexico in connection with the lifting of the drilling moratorium there.
"An affirmative decision in favor of imports from the oil sands could antagonize Democratic Party greens with concerns regarding the air quality, water quality and climate change impacts associated with producing unconventional oil from bitumen," Book wrote, emphasizing why other policy choices may be pursued just to avoid giving an OK to Keystone XL.
So you can assume that the conventional wisdom now has at least one very public skeptic.
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