Obama puts off Keystone decision. Quelle surprise.
The US state department's anonymous leak to the media on Tuesday lowering expectations about a decision on Keystone this year should not come as a surprise to anyone following Barack Obama's poll numbers or the increasing bitterness on the left about his perceived closeness to industry.
The opposition to the Keystone project – now in its governmental review phase after public hearings concluded 14 October – has become so rancorous that if Obama should approve the pipeline now he would be starting his re-election campaign with little left of his traditional support base.
With many moderates flocking to the Republican party or simply deciding not to vote this time, political pundits are saying without his core support Obama's chances of becoming a one-term president would increase dramatically. Moreover, Obama could be timing the decision – consensus seems to be that the state department will approve Keystone – to make the maximum impact during his campaign. Joblessness is bound to stay the foremost election issue and the $7 billion pipeline is one of a handful shovel-ready projects in the US.
Another reason to keep kicking the Keystone hot potato down the road is that the importance to the US of Alberta's oil is diminishing. MINING.com has argued that the lack of pipelines may not be the greatest threat to the oil sands:
Even if both TransCanada's (NYSE:TRP) Keystone XL and Enbridge’s (TSE:ENB) Northern Gateway pipelines are built bitumen is expensive to extract, upgrade and refine and cannot compete with the many new shale oil plays – particularly in the Bakken oil basin – which have pushed US production to its highest level in a decade and could see it become the planet's number one producer of crude.
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