The White House announced an appointment to President Obama’s Global Development Council that may signal the administration’s stance on the long-delayed Keystone XL Pipeline decision. John Podesta, former chief of staff to President Clinton from 1998 to 2001 and a long opponent of the project, was nominated as a counselor to the President.
Podesta is currently chair of the Center for American Progress think tank, which has been very critical of the project. Although he announced he would recuse himself from any discussions on the project, should his input on environmental and energy be strongly considered by the administration it could carry over to the final decision on the pipeline.
“This is likely an adverse turn for securing a favorable decision on the Keystone XL,” John Kneiss, director, North America for Hart Energy Research & Consulting. He said that despite theannounced recusement it would be difficult for a senior advisor to the President not to express his viewpoints.
It is becoming increasingly likely that the administration will continue to delay a final decision on TransCanada’s pipeline almost another year until after the mid-term elections next November. “I believe the administration is trying to come up with ways to defer the decision and then as a true lame duck likely issue a denial,” Kneiss said.
The industry already appears to be adjusting to this likelihood as it is discovering alternative ways to move volumes from the Canadian oil sands to the U.S. Gulf Coast, including rail car and marine transport. In the end, the economic impacts won’t be as large for the American worker, and the industry shouldn’t experience any large setbacks. Ironically, the environmental community’s fight against the project resulted in less jobs and transport solutions that are arguably more troubled than pipelines while doing nothing to slow the production or consumption of crude oil.
While a lot of the attention on this appointment has centered on the Keystone XL, Kneiss said that he believes that Podesta’s overall environmental views are more troubling for the industry. “I think more significant is his view that the executive branch should use all authority available to adopt policies and rules on climate change and the environment, which includes reduction in conventional energy use and expansion of renewable energy.”
Podesta’s role as a senior counselor is likely to provide him with more influence and access to President Obama than other staffers who were supporters that recently left the administration that held similar beliefs and values on energy and the environment.
“As senior counselor, he can expect to have Oval Office discussions with limited participants including the president, whereas other junior staffers likely gave briefings or held discussions as part of much larger meetings that would have diverse views expressed,” Kneiss said.