President Obama punts key oil pipeline decision past the election

After weeks of barracking Congress, requesting they “Pass the Bill” to help create jobs. President Barack Obama controversially delayed the approval of a massive oil pipeline between the U.S. and Canada, causing accusations he was putting election-year politics above job creation and it was another sign of indecisiveness by a president who appears all at sea on how to create jobs in a struggling economy.

The White House said it was putting off consideration of TransCanada Corp’s proposed $7billion Keystone XL pipeline until it can study new potential routes that avoid environmentally sensitive areas of Nebraska, an action that is likely to mean a decision only after the 2012 election. The State Department said it will require an environmental review of the new section, which is expected to take at least a year.

The requirement for a new environmental impact statement and more public comments means the decision won’t be made until after the 2012 elections. Controversy over the pipeline created a headache for the Obama administration, but the delay might not end it.

The proposed Keystone XL pipeline has become a classic example of an issue that pits environmentalists against energy developers. Environmentalists have made the pipeline a test case of whether President Barack Obama will fight climate change. The pipeline would ensure decades of an increased supply of a form of oil that produces more heat-trapping emissions than conventional oil does because more energy is needed to extract and refine it.

The announcement by the State Department means Calgary-based TransCanada will have to explore a way to move the proposed Keystone XL pipeline around the Nebraska Sandhills region and Ogallala aquifer, which supplies water to eight states.

American Petroleum Institute President Jack Gerard said,” the decision put politics in an election year above the creation of thousands of jobs: ‘Whether it will help the president retain his job is unclear, but it will cost thousands of shovel-ready opportunities for American workers.’

Republicans and supporters of the project said the timing wasn’t a coincidence, as Obama was pressurised by environmental groups who had said they may not mobilise to help Obama win re- election if he approved the pipeline.

“Calling for a new route is nothing but a thinly veiled attempt to avoid upsetting the president’s political base before the election,” House Speaker John Boehner, an Ohio Republican, said in a statement.  “This is clearly a political decision, and everyone knows it,” Thomas Donohue, president and chief executive officer of the U.S. Chamber of Commerce, the nation’s largest business lobbying group, said today in an e-mailed statement. “Unfortunately, it will immediately cost more than 20,000 Americans an opportunity to get a job working on the pipeline and hundreds of thousands more jobs in the future.”

Election-year politics played no role in the decision, a State Department official said today.

President Obama said the 1,661-mile pipeline is likely to affect the health and safety of the American people as well as the environment. The 1,661-mile (2,673-kilometer) pipeline would deliver 700,000 barrels a day of crude from Alberta’s oil sands to the Gulf of Mexico by crossing Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

The administration is keen to point out Obama’s other environmental accomplishments, which haven’t gotten the attention the president’s aides would like. The Recovery Act funded considerable leaps in renewable energy and efficiency research. Mandates on fuel standards will nearly double mileage efficiency by 2025, in turn reducing fossil-fuel consumption.

The decision allows the administration to delay a final approval past next year’s election thus avoiding a lose-lose decision certain to be politically unpopular.

While the decision may be popular with part of his base it further demonstrates charges that the president is more concerned with his own re-election chances then reviving the employment fortunes of the nation.

The decision to delay marks a success for environmental campaigners who have mustered growing opposition to the project, raising concerns about the danger of leaks from the 1,700 mile pipeline including actor Robert Redford who added his support to the campaign.

Russ Girling, TransCanada’s chief executive, said: “This project is too important to the US economy, the Canadian economy and the national interest of the United States for it not to proceed.”

One has to argue, a punted decision by the Obama Administration, but as what cost to the economy and the president’s recent job creation rhetoric? The deferred decision will cost him personal and political credibility with many American’s already lacking confidence over his management of the economy.

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