Obama and Keystone: Reading the tea leaves

Blog Post for Canada Trade StoryFor those looking for any tea leaves regarding the administration's upcoming Keystone XL pipeline permit decision, President Obama's session Wednesday with House Republicans offered a few hints — but not many — on how it would go.

Rep. Jeff Fortenberry (R-Neb.), whose state is one of six that the pipeline would run through if constructed, said the president debated both the benefits and disadvantages of allowing the $7 billion project to move ahead.

"He talked about the upside of it. He talked about the downside of it. The overhyped benefit versus the real benefit. He answered it carefully," Fortenberry said. "Clearly, he's deliberating still."

According to a Republican who asked not to be identified because the meeting took place behind closed doors, Obama noted that the project would benefit American refineries as well as Canadian businesses, but wouldn't create as many jobs as its proponents suggest. Oil companies and some Republicans have said it would create as many as 100,000 jobs; TransCanada CEO Russ Girling acknowledged in an interview with The Post in 2011 that the project would create 6,500 direct construction jobs for a two-year period.

Obama also predicted that the decision would be made "fairly promptly," the Republican added, and would not satisfy everyone. That's a given, since environmentalists have identified blocking Keystone as one of their top priorities for the president's second term, and Republicans and some oil industry officials are equally committed to winning its approval.

The president and his aides have rarely talked about the Keystone permit decision in public over the past few years, emphasizing that the State Department has primary authority over TransCanada's application. On Tuesday, White House spokesman Jay Carney deflected a question on the subject, saying the process was "ongoing."

"I have nothing to say to about an announcement that is not ready to be made and that is part of a process that is undertaken at the State Department," he told reporters.

But Obama's comments make it clear he's fully versed with the details of how Keystone would affect key sectors of the U.S. and Canadian economy, and he had yet to decide whether to grant the permit application despite the fact a recent draft environmental assessment by the State Department downplayed the project's climate impact. While Obama indicated that a final decision could come soon, it is unlikely the administration could make such a determination before early July, given the ongoing public comment period and the State Department's obligation to conduct a 90-day review of whether the project is in the national interest.

When it comes to Americans' view of Keystone, most of the public appears to back it. A June 2012 Washington Post poll found Americans supporting Keystone's approval by more than 3 to 1 (59 to 18 percent); while more than one fifth had no opinion. More than eight in 10 (83 percent) believed the pipeline would create a significant number of jobs, while barely a third of the public (34 percent)  predicted serious damage to the environment.

But environmentalists, who held both a protest and rally on the issue in Washington, D.C., last month, argue that Obama cannot fulfill his pledge to address global warming if he eases the way for importing crude oil from Canada's oil sands.

Staff writer Rosalind S. Helderman and Capital Insight pollster Scott Clement contributed to this report.

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