PIPELINE POKER

The President’s Proposed Pipeline Political Poker Problem

On the one hand, Obama needs the Union vote, and the unions want the Keystone Pipeline for the jobs it will create.  On the other hand, Obama needs the Environmentalists vote and they are adamantly opposed to any and all new pipelines.

The original proposed route of the pipeline from Canada to Cushing Oklahoma would run right through, or rather above, the Ogallala aquifer in Nebraska.  Needless to say, this had Nebraska politicians as well as most citizens of Nebraska siding with environmentalist in opposing the project.

Obama, who has built a career on voting “present”, decided to pander for votes from both sides by deferring a final decision until after the election.  TransCanada Corp. appears to be a better poker player than Obama.  They played the perfect hand in the on going game of pipeline poker by agreeing to reroute the pipeline around the area of the aquifer within days of Obama’s announcement.  If this is not acceptable, they intend to look to China as a market for the oil.

It's unlikely anyone that the White House, U.S. State Department or the Nebraska state legislature expected to see TransCanada go “all in” with a solution as quickly as it did.

Nebraska state politicians are now saying they want the State Department to expedite the review process, Obama's hand has been exposed in a way he never imagined.

The mistake Obama made was that his excuse for the delay was tied strictly to the issue of the routing.  Obama had said in a television interview the risk of water contamination trumped a few thousand jobs.
But with TransCanada coming out with a viable option which is backed by Nebraska Democrats and Republicans, and the unions, the White House has been caught flat-footed.

The response from the State Department, predictably, has been that it won't expedite the review.  This makes it pretty obvious that this was a decision based solely on politics and pollsters -- not economics and energy security.

The same has to be said about the environmental protesters.  Their issue, apparently, was with routing of the pipe through the aquifer.  Now that this is off the table, which presumably means the need for protest against Keystone has similarly disappeared, the environmentalists should go bother someone else -- the coal folks, perhaps.  I have read that coal-fired power is responsible for 65 per cent of Nebraska's electricity.

But that's not happening.  The only conclusion that can be drawn from this is that the environmental protest was never about the routing through the aquifer -- it was about getting off oil.