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Obama’s Keystone Decision: Greens or Canada?

President Obama has put his Keystone XL pipeline decision off as long as he could, but soon he’s going to have to choose between his most important trading partner and one of his biggest constituencies. The New York Times has the story:

Canada, the United States’ most important trading partner and a close ally on Iran and Afghanistan, is counting on the pipeline to propel more growth in its oil patch, a vital engine for its economy. Its leaders have made it clear that an American rejection would be viewed as an unneighborly act and could bring retaliation. […]

So far, Mr. Obama has been able to balance his promises to promote both energy independence and environmental protection, by allowing more oil and gas drilling on public lands and offshore while also pushing auto companies to make their vehicles more efficient. But the Keystone decision, which is technically a State Department prerogative but will be decided by the president himself, defies easy compromise. 

This decision should be a no-brainer. Building the pipeline will strengthen ties with Canada and help both countries move towards oil independence. The NYT reports that the pipeline would “increase Canadian oil imports by more than 700,000 barrels a day, the equivalent of roughly two-thirds of Venezuelan imports.” We heard from energy oracle Edward Morse last week that the U.S. could be independent of all foreign sources of oil except for Canada in five years. Building the Keystone XL is an important step toward that goal.

For Obama, the political calculus should be as easy as the economic analysis. As a second-term president, he can afford to disappoint a key constituency. As a world leader, he can’t afford to alienate his neighbor to the north. Canadian leaders are hinting that failure to permit the pipeline will force Canada to look to other markets, namely oil-hungry China.

Did the Forward on Climate rally held in Washington this past weekend convince Obama to ignore the clear arguments for going ahead with the pipeline? Maybe, but we certainly hope not.

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