No Etch A Sketch Shake Coming for Obama in Pipeline Politics

NEW YORK ( TheStreet) -- If anyone was looking for an Etch A Sketch moment from President Obama when he spoke on energy policy with the pipes of the Cushing, Okla. oil hub as a backdrop on Thursday, that was a pipe dream.

Obama sketched in some more details about his energy policy, but the energy policy rhetoric has no reset button, merely gradations of already entrenched positions staked out by the special interests that Obama's speech seemed designed to placate.

Expect no Etch A Sketch moments to be forthcoming in this election year as Republicans continue to blame Obama for high gas prices and Obama pushes ahead with his all-of-the-above energy plan for the future, encompassing natural gas as a bridge fuel, a variety of clean energy technologies, nuclear, infrastructure improvements and the smart grid, to name just a few of the major items on Obama's energy policy check list.
Obama gives a little on the Keystone XL pipeline, but there is no peace in pipeline politics.

The actual "news" in the President's speech regarded an expedited bureaucratic process for approval of the southernmost extension of the Keystone XL pipeline, the Cushing-to-Gulf Coast route, cutting through the "red tape," the president said.

Yet highlighting a tweak to federal energy bureaucracy for the least contentious part of the pipeline is not likely to captivate the general public nor shift the special interest debate.

Obama repeated some White House talking points about domestic oil production being up during his administration more so than during previous administrations: "Anyone who says that we're somehow suppressing domestic oil production isn't paying attention," Obama said.

Yet anyone who has been paying attention to the political battle has heard this talking point many times before from the White House. It's a fact, yet a fact complicated by the fact that the U.S. oil and gas production number would have hit a historic high regardless of who was in the White House, given the timing of the shale drilling boom.

Obama staked out his usual pragmatic middle ground, offering up the southernmost extension of the Keystone pipeline as an example that he is not standing in the way of oil and gas production and refining, yet also cautioning against rushing through the permitting and review of projects that can have serious environmental, safety and human health consequences.

As had been noted widely in the press in the days leading up to the president's Cushing appearance, neither supporters or Obama critics were going to be placated by the speech. Republican House leader John Boehner (R., Ohio) said the expedited process for a pipeline project already slated to start in June was like taking credit for renewing a driver's license.

Mitt Romney, the front runner for the Republican presidential nomination, dismissed Obama's concession on the Cushing pipeline as a sign of a president losing popular support, and suggested that the best thing that can occur for the Keystone XL pipeline is for Obama's public support to continue to erode.

Oil and gas CEOs said it simply wasn't enough -- and when has Obama ever done enough as far as the oil and gas lobby is concerned?

The environmental heavyweights chided the president with varying levels of displeasure. The Natural Resources Defense Council offered up once more the talking point that the pipeline benefits Canada more than the U.S.

"President Obama should not provide special benefits to a company that seeks to build a tar sands pipeline benefiting Canadian tar sands producers. If getting domestic crude to the market is the problem, the Canadian Keystone XL tar sands pipeline is not the answer," the NRDC said in a release.

Further out on the tree-hugging spectrum, the Sierra Club said it was "deeply disappointed" by Obama's pipeline plan and called it a "wrongheaded decision" that will do nothing to lower gas prices and only helps the richest oil companies get richer."

The Sierra Club was probably accurate in its assessment that, "this may have been a political calculation for the administration."

Indeed, the political calculations in pipeline politics are set to continue, more calculations and sound bites than -- as they say in Keystone XL pipeline ground zero of Nebraska -- you can shake a stick at. If there was any smidgeon of a reset on Thursday, it was Obama moving slightly out of step with the environmental lobby, but that's the hallmark of pragmatic Obama: he won't lose these voters over this pipeline concession when the election rolls around, while it helps move the energy argument along and combat what his critics charge.

President Obama made one comment that can't be denied: U.S. oil production cannot control global energy prices. Indeed, as the market weighed a slowing growth profile from China and renewed concerns about European debt problems on Thursday, crude oil sold off sharply from near three-week highs, but neither the president nor the politically contrived special interests had much to do with it.

The Etch A Sketch of global crude oil prices resets every day on the screens of traders, and the market continues to bet that the U.S. oil and gas boom is coming and is going to last decades regardless of the "deep disappointment" in the Sierra Club offices.

Energy experts can debate whether tapping the Strategic Petroleum Reserve is justified or would just be a short-lived victory on the way to even higher oil prices, whether the Saudis can control crude oil prices they describe as being set by fear, not reality, and finally, whether oil speculators are to blame for all the pain-at-the-pump.

Meanwhile, the rhetoric from politicians trying to make hay -- or in this case pipelines -- of the perception that consumer pain-at-the-pump is being neglected, doesn't change. It might be much to Obama's chagrin, but there is no way to fast track this debate toward a more constructive and final end.

-- Written by Eric Rosenbaum from New York.

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