Keystone XL oil pipe circus set to drag into 2016
The glacial pace of the U.S. government's review of the Keystone XL pipeline has advanced making the pipeline more likely but the slow pace of the process means a startup before 2016 looks impossible.
That's bad news for Alberta oil producers, who will probably find themselves fighting for pipeline space by then if current projections for production growth are correct.
It's also hardly great news for the environmental lobby. At best what has been won is a Pyrrhic victory. Keystone XL has been successfully delayed for years but not stopped. Meanwhile, oil sands crude flows unimpeded through other pipelines in ever-growing volumes and is set to take to the rails, an inherently more dangerous and more polluting way to move oil about the North American continent.
So far backer TransCanada is keeping quiet about timetables. But clearly, a company that has seen the completion date for this project slip from 2012 to 2015 and now likely later must be frustrated.
The root of the problem lies in President Barack Obama's desire to have it both ways on climate change policy. He wants to do something to drag America forward on tackling this issue. But he is unwilling to force a dramatic change in policy when it comes to oil consumption. He is ready to gradually regulate coal out of existence through myriad of new rules but he will not take a stand to put climate change at the heart of all regulatory decisions.
This is why Keystone XL has been bogged down. Obama, ultimately, is unwilling to embrace the lifecycle approach to climate change regulation on oil and gas that the environmental lobby wants.