After the vote and the veto, the Keystone XL pipeline could make a comeback

Keystone may not mean much for jobs or the environment, but it could be the beginning of Washington compromise

The U.S. Senate launched its first great debate of 2015 this week, on the proposed Keystone XL pipeline that would carry oil from the tar sands of Alberta to the refineries of Texas. Predictably, the rhetoric was apocalyptic.

“I think XL stands for extra lethal,” said Sen. Barbara Boxer (D-Calif.), a leading opponent of the pipeline, pointing to the high lead content of Canadian oil. “This is really a big hug and a big kiss to Big Oil.”

“We're talking about jobs,” protested Sen. James M. Inhofe (R-Okla.), who has dismissed climate change as a hoax.

But there were at least two strange things about this not-so-great debate.

First, hardly anyone thinks the Keystone pipeline is as important as it once appeared.

Opponents hoped that if they blocked the pipeline, Canada might be dissuaded from mining oil from Alberta's northern sands, a process that releases massive emissions of greenhouse gases into the atmosphere. But Canada hasn't been deterred; the oil has moved on older pipelines and rail cars instead. Crude oil's price drop below $50 a barrel has discouraged new exploration, but that too hasn't stopped production from existing mines.

Keystone's supporters claimed that the pipeline would make the United States less dependent on foreign oil, create thousands of jobs, spark an economic recovery and push the price of gasoline down. Most of those claims turned out to be flimsy, too.

Second, almost everybody thinks they know what the outcome of the debate will be. The Republican-led Congress will vote to approve the pipeline, but President Obama will veto it. It would take a two-thirds majority in each house to override his veto, meaning a significant number of Democrats would need to change their votes. That doesn't appear likely.

A year ago, a lot of the smart money in Washington (plus me) expected Obama to approve Keystone, if he could get some environmentally friendly concessions in return. Initially, Obama said his decision would be purely a matter of whether Keystone would have a significant impact on climate change. But as the debate on that issue turned muddy (Obama's State Department said the environmental impact would be insignificant), the president raised more hurdles.

“Is this going to be good for

the American people? ... Is it going to actually create jobs? Is

it actually going to reduce gas prices that have been coming down?” he asked in November.

“It's good for the Canadian oil industry, but it's not going to be a huge benefit to U.S. consumers,” he said in December.

What made it easier for Obama to embrace the anti-Keystone position? The economy — plus some politics.

Now, of course, we don't need Canadian oil to bring the price of gasoline down now. The U.S. economic recovery has taken hold, making two-year construction jobs from Keystone look less enticing. And the Democratic senators from oil states who pleaded with Obama to keep the Keystone decision open, Mary Landrieu of Louisiana and Mark Begich of Alaska, lost their jobs in November.

This month's Senate debate isn't going to chart a new energy strategy for the United States. If that happens, it will be in a broader bill that Sen. Lisa Murkowski (R-Alaska) has said she will pursue this spring.

Instead, the battle is mostly an exercise in symbolic politics. Democrats want to paint Republicans as indifferent to the environment (see: Boxer); Republicans want to paint Democrats as indifferent to job creation (see: Inhofe).

And each side has constituents and donors to satisfy: environmentalists for the Democrats, oil and working-class white voters for the Republicans.

Symbolism aside, there are still conditions under which it would make sense to approve Keystone. It could be a bargaining chip to get Canada to meet its commitment to reduce emissions of greenhouse gases. (Oil production has increased Canadian emissions, despite the country's green image.)

Or the pipeline could play a similar role in a deal with the GOP Congress. The White House could swap approval of Keystone for, say, a legislative blessing for tough limits on emissions from coal-burning power plants or construction of a more efficient national power grid and other climate-friendly measures.

So after the vote and even the veto, Keystone could yet make a comeback. At least one Republican leader said so last week, with an eye on possible swaps:

“There's things that the president wants and there are going to be things that the Republican Congress wants,” Sen. John Cornyn (R-Texas) told the Houston Chronicle. “And between those two bookends, there ought to be some room for negotiation.”

In a year when Obama has said he's ready to use his veto pen on a long list of issues — Keystone, his healthcare law, his immigration actions — the most important negotiations may happen after the vetoes.

So there is something big at stake, after all, in the Keystone debate: whether the president and his GOP opponents can learn to bargain productively. That may be even more important than a pipeline from Alberta to Texas.

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