The Obama administration's announcement that it will reject TransCanada Corp.'s application to build and operate the Keystone XL pipeline through the Great Plains may do nothing to slow the project. At least, it need not.
Two months ago, the State Department announced it would consider a new route for the pipeline, as Nebraska state lawmakers were about to demand, in order to skirt the wetlands and other sensitive ecosystems in their state's Sandhills region. The Obama administration said that it would take 14 months to devise a new route; Republicans in Congress demanded a decision by Feb. 21 and included the deadline in the payroll tax bill passed last month.
That timeline was too short -- an obvious political stunt. The Obama administration is getting around it by simply rejecting the pipeline for now and inviting TransCanada to reapply.
Still, as we have said, a path around the Sandhills can be found sooner than January 2013 -- a date that is politically (and suspiciously) convenient for the Obama administration. Ultimately, the U.S. should approve TransCanada's proposal to build its pipeline to carry crude from the oil sands of Alberta to the U.S. Gulf Coast. The U.S. would benefit from the oil supply itself and from the business of refining the 700,000 barrels of oil a day that would arrive via the pipeline. The Sandhills delay cannot be avoided, but it can be kept to a minimum.