On Thursday, Obama dodged a politically sensitive situation by deferring a long-awaited decision on extending TransCanada's Keystone XL Pipeline further into the United States.
Labor unions -- a key Obama constituency -- support the pipeline extension because of the union jobs it would create, but environmental activists and anti-'Big Oil' groups -- also among Obama's supporters -- strongly oppose it.
In a statement issued Thursday, Obama said he supports the State Department's decision to "seek additional information about the Keystone XL Pipeline proposal."
"Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood," Obama said. "The final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people."
The Obama administration was supposed to make a decision on extending the pipeline into Nebraska by the end of this year. (Because the pipeline crosses the international border, the State Department must sign off on it.)
TransCanada, the pipeline company, noted it has worked with the State Department for past three years “to ensure Keystone XL would be the safest pipeline ever built.”
The pipeline would carry oil from Canada across Montana, South Dakota, Nebraska, Kansas and Oklahoma on its way to refineries on Texas' Gulf Coast.
Since 2008, TransCanada noted, there have been more than 100 open houses and public meetings in six states. Thousands of pages of supplemental information and responses to questions were submitted to state and federal agencies; and the State Department received over 300,000 comments on the project.
Moreover, a final environmental impact statement was issued for the project. “This was by far the most exhaustive and detailed review ever conducted of a crude oil pipeline in the United States,” TransCanada said.
"This decision is deeply disappointing and troubling," said the American Petroleum Institute, which represents 480 oil and natural gas companies. "Whether it will help the president retain his job is unclear, but it will cost thousands of shovel-ready opportunities for American workers," said API President and CEO Jack Gerard.
"There is no real issue about the environment that requires further investigation, as the president's own State Department has recently concluded after extensive project reviews that go back more than three years. This is about politics and keeping a radical constituency opposed to any and all oil and gas development in the president's camp in November 2012."
API says the pipeline project, in addition to creating thousands of jobs for Americans, would also strengthen the U.S. energy partnership with Canada and help reduce U.S. reliance on oil from unstable countries.
TransCanada said it now plans to hold discussions with the U.S. State Department to "discuss the next steps" in extending the pipeline. The State Department has decided to explore alternative routes for the pipeline, to avoid running it over a large aquifer under the Nebraska Sandhills.
The State Department said the review could be completed in early 2013 -- right after the 2012 presidential election, in other words.
"We remain confident Keystone XL will ultimately be approved," said Russ Girling, TransCanada's president and chief executive officer. "This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed."
“Keystone XL is shovel-ready,” Girling said. “TransCanada is poised to put 20,000 Americans to work to construct the pipeline - pipe fitters, welders, mechanics, electricians, heavy equipment operators, the list goes on. Local businesses along the pipeline route will benefit from the 118,000 spin-off jobs Keystone XL will create through increased business for local restaurants, hotels and suppliers.
“Five billion dollars in property taxes paid by TransCanada over the lifetime of the project will allow counties in States along the pipeline route to invest in new schools, roads and hospitals.
"If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil from repressive nations, without the benefit of thousands of jobs and long term energy security," concluded Girling. "That would be a tragedy."