It looks like the the long saga of the Keystone XL pipeline is finally going to come to a close, as the Washington Post reports that "The Obama administration will announce this afternoon it is rejecting a Canadian firm’s application for a permit to build and operate a massive oil pipeline across the U.S.-Canada border."
I have written previously on this blog, in a very long post, that the Keystone XL Pipeline was simply not necessary for America's energy security. The very real environmental costs, including increased greenhouse gas emissions and substantial environmental degradation in northern Alberta, are not worth the questionable benefits to American security, especially given that much of the imported Canadian oil would simply be re-exported due to changes in America's refining capacity.
On the cynical side, some will see this as a move that will help the President shore-up his support among environmentalists. Certainly, the protests in November that surrounded the White House with activists opposing the pipeline showed that the environmental movement was able to put some political weight behind its opposition.
However, I think there is a case to be made that this is about more than simply naked political calculation. Instead, this should be seen as a decision that is part of a larger strategic move away from oil. This administration has supported alternatives to oil, including next-generation biofuels and electrified cars, as well as pursuing efforts to reduce demand for oil by increasing fuel economy standards for American autos.
Although largely unremarked upon, I think that 2011 will go down as the most significant year for America's energy security since 1991, when the fall of the Soviet Union and the invasion of Iraq combined to secure new sources of oil that would help fuel the substantial global economic growth of those two decades (you can read more about why I think 1991 was so important in my article published in The Atlantic, "Race Around the World, The 20-Year Contest for Oil").
2011 was so important because it saw real course changes on both the supply-side and the demand side of energy. We are seeing new energy production within the Continental U.S. - whether from shale gas, oil from the Bakken field, or the world-leading increase in alternative energy. We are also seeing new policies that will increase energy efficiency and reduce energy demand - like the new rule that will double America's fuel economy by 2025 and the move toward green buildings.
President Obama will have the opportunity to place the canceling of the Keystone XL pipeline within this context at next week's State of the Union address. If he doesn't mention energy - something he skipped last year - it will be a missed opportunity.
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