The Republican wave of the 2014 midterm elections confirmed that the fate of the Keystone XL pipeline, which has dogged the administration since before the 2012 election, is THE defining energy debate of the Obama presidency and useful shorthand for the debates to come.
In short, Keystone demonstrates the tension between national political will to act (or not) on energy “issues” and the reality that any solution to an energy “issue” entails local public support of a physical energy “project.”
Throughout this election cycle, Republicans have promised a bill to force approval of the project as a central part of their legislative agenda for the new congress. With Tuesday’s results, that bill likely enjoys a filibuster-proof majority in the Senate and, barring the unexpected, would easily pass in the House where Republicans increased their majority.
The tension is that the promised Republican bill only addresses one of the underlying public perception and policy concerns. True, the Obama administration has treated this decision like it wishes anyone else in the world could make it, and clear direction from Congress might help push the administration to act. But that directive alone may not clear the path for a new pipeline the way some policy-watchers expect.
Keystone faces the questions of local legitimacy and market feasibility that seem to haunt almost any large energy project. Throughout the process, delays have been rooted in legal and political challenges regarding local environmental and cultural issues in Nebraska. The related state legal disputes have influenced the process well beyond the media coverage of protests by national organizations. Additionally, TransCanada, the company that owns the entire Keystone pipeline system, has already revised the route once in response to local concerns. The company recently announced an increase in the estimated cost for the project to $8 billion, an important piece of market context lost in yesterday’s focus on political outcomes.
There are energy “issues” beyond Keystone XL at stake in the upcoming lame duck session and the new congress. The Republican Senate undoubtedly will attempt to rein in the administration on climate change and EPA regulation, in addition to exercising its confirmation authority on key vacancies at the Nuclear Regulatory Commission, the Department of Energy and other agencies. These and other debates will set the agenda on energy “issues” for years to come.
When it comes time to invest and hire and pour concrete to make energy “projects” real, however, the lesson from Keystone is clear. To realize their potential, proponents of large projects need not only to capture national attention and support, but also to look below the national headlines, focus on local coalitions and opinion leaders, engage with local audiences and attend to public perception of shifting market realities.