Washington Bureau

02.01.14

Keystone Report May Allow Obama To Make Debt Limit Deal

The State Department report Friday saying the Keystone XL pipeline would have a minimal environment impact could clear the way for a debt ceiling deal.

Barack Obama may have a new bargaining chip in negotiations over the debt limit.

The release Friday of a State Department report on the Keystone XL pipeline gives the White House more wiggle room to approve the proposed infrastructure project that would transport 830,000 barrels of oil a day from the Alberta tar sands to the Gulf Coast.  Environmentalists have long opposed the pipeline because the process used to extract oil from the tar sands produces far more greenhouse gases than traditional methods of producing oil. The State Department study agreed with this but said the construction of the pipeline wouldn’t have much an environmental impact because the oil would be extracted regardless.

The report’s findings that the pipeline would have little impact on carbon emissions seem to indicate that the project will meet the strict criteria that Obama laid out in a June 2013 speech at Georgetown University. He said the administration would only approve the project if it “does not significantly exacerbate the climate problem.”

As the pipeline’s construction has been studied over the past half decade, it has become a cause célèbre both on the left and the right. Liberals and environmentalists see its construction in near apocalyptic terms because of the amount of carbon dioxide that could potentially be unleashed through tar sands extraction. Republicans, along many unions, have long pushed for it as a way to create jobs and promote energy independence. Mitt Romney campaigned on building the pipeline in 2012 and House Republicans have been pushing the project for years. In the meantime, Obama has hedged and not committed to taking any firm action.

In fact, for Obama, this has accidentally become a legacy issue. With Congress incapable of passing climate legislation even when totally controlled by Democrats, this is one of the few areas where the President can leave a mark on climate issues for the remainder of his administration. (Because the pipeline crosses international borders, it requires State Department approval and thus is subject to executive action). But, if the environmental impact is relatively minimal as the State Department report argues (though this is up for debate) why hold up?

The answer is that it gives the administration an easy concession to make to House Republicans. While Obama has insisted on a clean debt limit increase when the government hits its borrowing limit at the end of February,  the House GOP is pushing to get something in return. Keystone XL, which Speaker John Boehner has championed for years, would be a relatively pain-free concession, especially if the administration can use it to get a longer-term increase in the debt limit than the few months it received in the deal to end the October 2013 government shutdown.  Obama won’t suddenly decide to repeal Obamacare or give in to many of the other demands of the House GOP but approving a pipeline that his administration says will have a minimal environmental impact is a much easier deal to make