How Obama Could Nix the Keystone Pipeline (And Why He Won't)

President Obama will be confronted with the first big policy decision of his second term where environmentalists and business interests are at odds: the Keystone XL oil pipeline. Despite promising to act on climate change in his inaugural speech, all signs point to the controversial project going forward.

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On Wednesday, a majority of Senators (44 Republicans and nine Democrats) sent a letter to President Obama urging him to move forward on Keystone XL, a massive pipeline that would carry oil from Canadian tar sands to American refineries in the Gulf Coast. Nebraska Gov. Dave Heineman gave his approval to the plans on Tuesday, leaving Keystone's fate in Obama's hands. In January 2012, the President rejected initial plans for the pipeline, saying the deadline for approval was rushed. But ever since energy company TransCanada proposed a new route, the President has seemed to warm up to the plans. Proponents of Keystone XL say it will create thousands of jobs and bring down the cost of fuel. Opponents say it's an environmentalist's nightmare that would extend our reliance on a particularly dirty source of fossil fuels. Looking at the President's options, he certainly has avenues for stymying the Keystone XL. But many factors suggest that he won't.

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How Obama could nix the Keystone XL

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For the Keystone XL to move forward, the State Department needs to perform an environmental review. That report is expected to land on Obama's desk before April. And it just so happens that one of Washington's most vocal climate hawks, John Kerry, will be heading the State Department during this process. As Think Progress's Joe Room notes, Kerry has issued some of the strongest words on climate change of any senator. Here's a speech he gave last summer about the silence on global warming in the nation's capital:

Climate change is one of two or three of the most serious threats our country now faces, if not the most serious, and the silence that has enveloped a once robust debate is staggering for its irresponsibility..

I hope we confront the conspiracy of silence head-on and allow complacence to yield to common sense, and narrow interests to bend to the common good. Future generations are counting on us.

The State Department remains cagey about their current stance on the pipeline-a spokesperson wouldn't tell Reuters reporters how the department felt one way or the other. If Obama wanted to nix Keystone XL, he could let Kerry take the lead on flunking the project's environmental review.

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Why Obama will most likely approve the Keystone XL

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Environmentalists would like to think Obama's inaugural promise to 'respond to the threat of climate change' means that he'll stop the Keystone XL. But Obama's record on the issue leaves little room for optimism. Obama was against the pipeline before he was for it, before he ultimately put off making a decision until after the election. Last year he spoke favorably about the project while visiting a portion of the Keystone pipeline in Oklahoma. On that occasion Obama said, 'We need to make sure that we have energy security and aren't just relying on Middle East sources.'

When we look at financial contributions Obama has accepted, the President seems a bit too cozy with oil companies to deliver a fateful blow on the Keystone XL. As green energy researcher Steve Horn noted earlier this week, Obama's inauguration was funded in part by ExxonMobil. Still, many observers predict that Obama will get tough on climate change-just not on the Keystone XL issue. National Journal's Catherine Hollander and Erin Mershon made a compelling case that Obama will focus on tightening EPA emissions standards in his second term. And in a lengthy report for Politico, Darren Samuelsohn also predicts that the Obama administration will focus on small regulatory victories instead of big skirmishes:

Energy insiders say the White House will dribble out executive actions and federal rules over the next four years - the same low-key, bureaucratic approach the administration has taken since 2009.

According to analysts cited by The Guardian, the President appears primed to approve the plans early in his second term.