“The U.S. decision to delay approval of the Keystone XL pipeline is a catastrophic cop-out by the Obama administration.”
— David Wilkins, former U.S. ambassador to Canada under President George W. Bush

On Oct. 10, the Obama administration, under political pressure from Nebraskan politicians and environmental activists, postponed until after the 2012 election a decision on the route of the Keystone XL 1,700-mile oil pipeline.

The pipeline would carry a heavy form of crude oil extracted from oil sands formations in Alberta, Canada, to refineries as far away as the Gulf Coast of Texas.

At stake are the economic benefits of the $7 billion project and the thousands of jobs that would be created — and America’s need for a secure source of oil from Canada.

On Nov. 14, TransCanada said it reached a possible resolution with Nebraska officials to move the proposed route away from the environmentally sensitive Sand Hills region in order to keep the project alive.

But a U.S. State Department official reiterated earlier estimates that would take another 12 to 18 months to make a decision.

The State Department is empowered to approve or reject the project because it would originate in Canada.

Keystone XL has been a nightmare for the Obama administration.

It has pitted two of the president’s bedrocks of support against one another.

One group, the environmentalists, is dead set against any version of the pipeline. The other group, organized labor, adamantly supports it because it brings thousands of construction jobs.

The postponement could reshape the North American energy status quo.

Canadian oil producers historically depended upon the U.S. market and now will seek other markets. Canada currently is the number 1 supplier of oil to the US and possesses the second largest oil reserves in the world.

Canada’s Natural Resources Minister Joe Oliver told CBC News: “The oil sands can generate $2.3 trillion in economic activity over the next 25 years. If Keystone goes ahead, that would add another $600 billion and hundreds of thousands of jobs can flow from the oil sands development.”

The State Department ordered a review of the pipeline because a spill that could have threatened the Sands Hill region and the Ogallala Aquifer.

The Sand Hills region, the largest and most intricate wetland ecosystem in the United States, contains a large Ogallala Aquifer is a critical source of drinking water to about 1.5 million people in the Great Plains.

Environmentalists point out there has been 14 spills to date on the first phase of the Keystone pipeline, which went into operation last year. One was more than 20,000 gallons.

Russell Girling, TransCanada’s chief executive, said, “If Keystone XL dies, Americans will still wake up the next morning and continue to import 10 million barrels of oil from repressive nations without the benefit of thousands of jobs and long-term energy security.”

Canadian Finance Minister Jim Flaherty said the Keystone delay may increase the pace of efforts to open up the Asian market for Canadian oil. He and Canada’s Prime Minister Stephen Harper are in China to discuss cooperation with the energy-hungry Chinese on extracting Canada’s oil reserves. China already has an $11 billion stake in Canadian oil production.

The postponement of Keystone XL will not change America’s long-running dependence on foreign energy.

But it could help China lock up more of the world’s oil production, cost infrastructure jobs in the United States and offend a reliable ally.

Harper, the Canadian prime minister, said the delay “does underscore the necessity of Canada making sure that we are able to access Asian markets for our energy products and that will be an important priority of this government going forward.”

Originally published in the Sarasota Herald-Tribune