Keystone XL in 2012

The Keystone Pipeline System was, perhaps, the biggest environmental battle of 2011. The proposed $13 billion system would transport Canadian crude oil between Alberta, Canada and Port Arthur, Texas via a 1,600 mile pipeline.

Environmental protesting of the pipeline began in early 2011, but Keystone XL began making headlines in November when several thousand protesters held a multi-day protest at the White House demanding that the President order the State Department to deny the federal permitting required to finish the project. On the other side of the argument were labor unions, which pressed Obama to approve the permit in order to create thousands of construction, maintenance, and operations jobs associated with its construction.

Four days into the White House protests, the President announced that he would delay the decision “until at least 2013, pending further environmental review.” It appeared that Obama had dodged a political bullet, giving environmentalists a short reprieve without fully disappointing labor unions whose support he needs for reelection.

This maneuver was squashed in December when the Republican-controlled U.S. House inserted language into an important payroll tax deduction bill requiring the President to make a decision on keystone within 60 days. After several days of heated political exchange, the measure was eventually cleared by both chambers and Obama will be forced to decide Keystone’s fate in February.

Environmentalists and industry are both spinning the abbreviated decision in their favor. Industry is betting on the guaranteed jobs and economic boost to force Obama’s hand in approving the permits. Environmentalists see a forced decision as a way for Obama to back out of the deal, saying 60 days was not long enough for the State Department to conduct a conclusive environmental survey.

In either case, expect Keystone XL to be a major issue in February and in the elections of 2012.