Obama’s Oil Bottleneck
The president could encourage oil production if he tried hard enough.


‘When it comes to American energy production, President Obama is like a rooster who crows at the sunrise, then imagines that he conjured up the morning,” jokes Ben Cole of the Institute for Energy Research. The White House has been taking credit for increased oil production, when it actually was taking place on state and private lands while output on federal lands was dropping. Now, the administration is touting the construction of the southern leg of the Keystone XL pipeline, though so far the process has been entirely outside federal jurisdiction.

This southern pipeline constitutes about one third of the original proposed Keystone XL route, from Cushing, Okla., to refineries in the Gulf Coast. Cushing, at the junction of several major pipelines from around the country, serves as a sort of switching station for oil on its way to the coast. Currently there’s a glut of oil in Cushing because the pipelines to the coast are too small to carry all of the oil from Oklahoma. On top of fixing a problem with our nation’s oil infrastructure, this route will cost $2.3 billion and is estimated to create 4,000 jobs starting in 2013.

It makes sense then that the White House would want to be associated with this pipeline. The administration has been claiming that they’ve done “all we can do” to help this section of the pipeline, a claim Obama is likely to repeat when he visits Cushing today. This assertion is technically true, but misleading. Because this is an interstate pipeline, the permitting process will be completed on the local level, in Oklahoma and Texas. As a result, the administration can do very little. The only oversight the federal government has over such a permit is during a perfunctory review by the Army Corps of Engineers.

Nevertheless, according to a source within the White House, the president may claim in his speech that he will “shave several months” off this process. This is usually a quick review, so it’s hard to imagine how the president will expedite it significantly. In any case, cutting down on this period would contradict the administration’s original reasoning behind halting the full Keystone permit in November. They argued that they had to wait for all the proper studies to be completed and considered before accepting Keystone’s proposal. Now that there’s political pressure for the White House to appear to be combating high gas prices, however, these environmental considerations have become less dire.

Since the Keystone proposal started receiving more attention last fall, the administration has been sitting on the fence between competing interest groups. Bedfellows make strange politics. The administration denied the full permit in the face of protests from environmental activists, but ever since then, it has been trying to signal its enthusiasm for the project to mainstream voters in the face of rising gas prices.

Even if one were to assume that the administration’s recent zeal for the pipeline is in good faith, there are several other steps the administration could take to facilitate the completion of the project. The northern segment of the pipeline terminates in Canada, so the permitting process is overseen by the State Department. The administration claims that it could not accept the original Keystone route this year because of concerns that it would run through a major aquifer in Nebraska. But the administration didn’t voice these concerns during the three years that the Keystone permit was being processed. Secretary Clinton had actually signaled the State Department’s support for the original route in August. It wasn’t until political pressure to block the construction mounted in November that the administration publicly voiced concern about it.


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