President Obama's veto Tuesday of a Republican bill approving the Keystone XL oil pipeline is hardly the end of the line for the highly-debated project. The veto wasn’t unexpected, but supporters in and out of Congress have vowed to fight on. Republicans in the Senate have said they will try to override the veto but likely do not have the votes.
But even the White House is saying this is not the end of the road. The administration has been careful to point out that the President vetoed the legislation, not the pipeline as the White House awaits its own review of the pipeline being conducted by the State Department. That review has taken years.
“There is still this small possibility that the Obama administration itself could still approve the pipeline once its own official review is complete which is coming soon,” says Yahoo Finance’s Rick Newman.
“I think the Keystone XL pipeline will get built at some point,” says Newman. "It may not be in this administration but I think that there is still a long way to go on this. We are far beyond the point that oil doesn’t matter just because prices came down.”
A lot has happened since the Obama administration started kicking the Keystone XL pipeline can down the road. Aside from politics, that includes explosive growth in the U.S. fracking industry and the cratering of crude oil prices—down as much as 60% since last summer.
Energy company TransCanada (TRP) first proposed the Keystone XL pipeline more than six years ago to bring oil from Alberta down to the Gulf Coast. The Keystone pipeline was supposed to create jobs and lessen U.S. dependence on foreign oil. Instead, it has created political theatre, polarizing policymakers over environmental and safety issues.
President Obama has never come out publicly on where he stands on the project.
But given the changes in the oil sector, does the U.S. need Keystone XL right now? “No. The United States doesn’t need this,” says Newman. “It’s oil coming from Canada and that’s one of the points Obama has made is that this doesn’t do much for the United States. It’s just a bypass for Canadian oil producers.”
While the United States is not in dire, immediate need of Canadian oil, additional pipelines would relieve some of the reliance on rail as the primary mode of transport for oil. Rail is a much less secure mode of transport that has resulted in several recent crashes mainly in Canada.
“Pipelines are a better and arguably cheaper and safer way to move oil,” says Newman. “We need this infrastructure.”
What we don't need is more political theater, and in order to build up infrastructure, lawmakers have to work together. That’s not something they’ve done too well in recent memory. Keystone pipeline legislation is case in point. “Congress has spent time coming up with the Keystone XL bill they knew was going to get vetoed… Meanwhile funding for the Department of Homeland Security is going to run out," says Newman. "We’re down to this really foolish brinksmanship we’ve seen before.“
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