Controversial pipeline moves closer to construction

The State Department has concluded that the highly controversial proposal for the Keystone XL pipeline would not have “significant impacts” on the environment, removing a major barrier to the construction of a $7-billion project that would ship oil sands crude oil from Canada to the Texas Gulf Coast.

The State Department’s findings, part of the final environmental impact statement for Keystone XL, were hailed by the oil industry and sharply criticized by environmentalists. Though other pipelines from Canada have sailed through the government approval process with little reaction from industry or environmentalists, Keystone XL has become a fraught issue in Washington and the Midwest, and it threatens to become a significant political liability for President Obama, whatever the outcome.

The final environmental impact statement is not the last word on the project. The State Department must issue a permit for the project because it crosses a national border, and it has to determine if the project is “in the national interest.” A final decision to issue permits for the Keystone XL is expect by year’s end.

If the administration fails to issue a permit, it could give credence to Republican and corporate arguments that Obama has failed in nurturing jobs. Business has poured millions of dollars into advertising, media and lobbying campaigns asserting the pipeline will create hundreds of thousands of construction jobs in the Midwest and secure a large stream of oil from a friendly, democratic neighbor.

But if the administration does back the project, it risks alienating the environmental base that helped bring Obama to power in 2008 and whose energy, enthusiasm and money the president desperately needs in 2012 for his reelection campaign. This week, more than 300 peaceful activists have been arrested for protesting in front of the White House against the pipeline.

Environmentalists contend that the pipeline encourages greater production of oil sands, an unconventional source of crude that needs to be mined from the earth, and will lead to the destruction of vast swaths of Alberta’s forests and pollution of waterways. They also point out that Keystone would pass through the Ogallala aquifer in Kansas and Nebraska, the Midwest’s main source of drinking water.

neela.banerjee@latimes.com