Big Oil to Obama: Okay the Pipeline Or Pay the Price

Industry threatening "huge political consequences." Will Obama hold out or sell out?

keystone xl pipeline
Andrew Harrer/Bloomberg via Getty Images
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During the payroll tax cut fight just before the holidays, I wrote a quick post suggesting that the Keystone XL pipeline fight was far from over, and that one plausible scenario – laid out for me by a top environmentalist – was that President Obama would cut a deal with enviros and labor unions to approve the pipeline early this year.  He'd make labor happy by giving them jobs, and enviros – well, he'd just point to the tough mercury regulations he signed off on at the end of last year and tell them to stop bitching and take one for the team.

The mere thought of this struck many – including David Roberts, a blogger over at Grist – as "tactically and strategically asinine." After all, having wussed out on everything from cap-and-trade legislation to tighter ozone standards, the president, in killing the pipeline (or at least delaying it until after the election), had finally stood up to Big Oil and its well-paid cronies in Congress.  Why backtrack now and snatch defeat from the jaws of victory?

Well, one reason might be that Obama's political advisors care more about winning the election than reducing America's addiction to oil, protecting drinking water supplies in Nebraska from toxic oil spills, and cutting the carbon pollution that is cooking the planet.  A shocking idea, I know, but not unthinkable.  It remains to be seen how steadfast the Obama administration will be on the pipeline as the political costs escalate.  The question now is, can Obama be chest-thumped into backing down?

Big Oil is clearly betting he can.  The other day, its top lobbyist made it clear that the industry is going to try to make the Keystone pipeline an election year wedge issue, like gun control or abortion.  In remarks at a high profile oil industry event, Jack Gerard, the president of the American Petroleum Institute, called the pipeline the industry's top near-term priority, warning the Obama administration to approve the pipeline or face "huge political consequences."

But Gerard, who I met when he was head of the National Mining Association back in the 1990s, is more than just a hit man for Big Oil.  He is also a slick, polished Beltway player.  He knows how to push political buttons.  In his remarks, he went out of his way to underscore the fact that the pipeline is supported by a traditional Democratic constituency that Obama would very much like to have on his side next November: labor unions.  "We will stand shoulder to shoulder" with unions that have backed the pipeline, including the Teamsters and the AFL-CIO's Building and Construction Trades Department, Gerard said.  To put it another way, Gerard is trying to use Keystone to split Obama's Democratic base, making him appear to be on the side of communist treehuggers rather than hard-working blue collar Americans who want to get to build what Gerard touts as the largest "shovel ready" project in America (as if big equals good).  You can already visualize the attack ads, can't you?  Throw national security into the mix – why not get our oil from friendly Canadians rather then Middle Eastern terrorists? – and you can see how this could become a nightmare for Obama in an election year.

It's all bullshit, of course.   You can read all about the problems of the pipeline here and here, including the inflated job-creation numbers that pipeline advocates like Gerard continue to push.  The pipeline is not a solution to America's energy problems.  It's a pay-off to Big Oil for millions of dollars of campaign contributions over the years, and a $7 billion dollar syringe designed to ensure America stays addicted to oil for a good long time.  The best way to solve America's energy problems – as well as to create jobs and save Miami from vanishing beneath the waves – is to move away from fossil fuels as quickly as possible.  It's simple and it's obvious – but it's not a message that wins presidential elections. 

The payroll tax rider passed by Congress in late December mandates a final decision on the pipeline by Feb. 21, so we'll see how this plays out very shortly.  But clearly, Big Oil is not going down without a fight.  In fact, Gerard's talk about the "huge political consequences" of stalling the pipeline reminds me of the scene in The Godfather when Michael Corleone explains how his father got a guy to agree to a deal he had initially refused: "Luca Brasi held a gun to his head and my father assured him that either his brains, or his signature, would be on the contract."