The State Department is expected to announce today that it will explore rerouting the Keystone XL pipeline away from Nebraska's most environmentally sensitive areas. The move will trigger a new environmental impact statement, which is expected to take 12 to 18 months to complete. In other words, a decision on the pipeline will not be made until the 2012 election. From Reuters:
The U.S. State Department is expected to announce as early as Thursday that it will explore a new route for the politically sensitive Keystone XL oil Canada-to-Texas pipeline, sources briefed on the matter said.
The political impact is obvious - Obama will kick the can down the road until after his reelection, thus avoiding a direct confrontation with a significant part of his base on a high profile environmental issue. Expect the GOP nominee to vow to approve the job-creating pipeline "in an environmentally responsible fashion" (a GOP-ese idiom translating into "empty phrase meaning nothing at all").
The policy implications are a little murkier. Obama could simply wait the 12 to 18 months, announce that the rerouted pipeline protects Nebraska and is safer, and approve it, hoping that climate hawks won't notice the minor detail of the carbon bomb. (Hint: we will notice.) TransCanada, which is said to be losing millions each day the pipeline is delayed, may simply give up. However, other companies are equally interested in selling environmental destruction: for example, Enbridge's planned pipeline doesn't require State Department approval and will be built where Enbridge already controls rights of way. It'll be necessary for the environmental community to fight each project as it comes up.