Keystone

The Obama administration denied a permit for TransCanada’s Keystone XL oil pipeline yesterday. The administration says it needs more time to review a new pipeline route that avoids ecologically sensitive areas of Nebraska.

With all the political posturing around the Keystone XL pipeline, it's a bit like the forest through the trees, and hard to hear the issue past the soundbites. 

I think environmentalists miss the boat when they put an all-or-nothing bid on the pipeline permit. For environmentalists to claim victory over the Keystone XL permit sets ups a false political and environmental end-game. Once the sandhills and groundwater issues in Nebraska get sorted out, denial of this pipeline permit doesn't land the United States any closer to a carbon neutral future.

Republicans similarly miss the boat when they read this permit denial as a signal of the administration's disinterest in creating jobs. The State Department said in a report to Congress yesterday that the pipeline would create 5,000 to 6,000 construction jobs during the two years needed to build the project, based on labor expenses TransCanada included in its application.

That's a lot of good paying jobs to leave on the administration's table. I was unsurprised to learn that administration extended the invitation, and TransCanada quickly accepted the opportunity to reapply with the new route.

The Keystone XL routing process is farther along than any of the alternatives. My guess is TransCanada will squawk, complain, and ultimately build the pipeline along the new, more environmentally sensitive route. The aquifer and sandhills will be better protected, the US construction jobs will be created, the tarsands will feed a global oil market, and the TransCanada investors will make a whole lot of cash.

The need for tarsands oil is too great, Canada's bid for "superpower" status in global oil markets too resolute to abandon the project all together. The latest round of siting review hasn't scared away companies in need of the XL pipeline.

TransCanada's CEO, Russ Girling, told investors Thursday that "[d]espite the delays in permitting, I guess what I'd tell you is that the interest in this project continues to grow."