Keystone XL Re-Route Does Little to Change Direction of Debate

Can Keystone move ahead with a new, more eco-friendly route?

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"This is not just a problem with the pipeline itself," Swift says. "The pipeline is going to be moving a type of petroleum [that is] the most greenhouse-gas-intensive oil in the world. Simply replacing 830,000 barrels a day [Keystone's capacity] of conventional crude at the Gulf with 830,000 barrels of Tar Sands is the equivalent of putting 6 million cars on the road as far as greenhouse gas emissions go."

"Regardless of the route, the pipeline as a whole is not in the United States' interest," he adds.

[Read: Pig Power: Manure Can Now Be Converted Into Oil.]

But others disagree and take issue with the necessity of the approval process, arguing that the State Dept. already conducted an environmental impact review—the same one being used to evaluate TransCanada's revised proposal for a presidential permit—which concluded that the pipeline didn't impose any significant environmental problems.

But if the pipeline isn't approved even with the extra safety and environmental hoops, it could set a bad precedent for any new projects and hurt the nation's oil and gas industries.

"We have the best refineries in the world and to bring more oil to those only benefits our economy, not to mention all of the workers [that would be employed] to construct the pipeline," says Nick Loris, energy policy analyst at the conservative think tank, The Heritage Foundation. "While those might be temporary, this would bring more jobs to our refining industry and would help more oil reach the world market and help lower prices."

The denouement of the oil industry's long-running soap opera is still months away, but supporters of the pipeline see a glimmer of hope depending on the outcome of the state approval process in Nebraska. If Nebraska signs off on the new route, that could give the State Dept. and the next administration an opportunity to approve the pipeline without as much political fallout.

"Given that [Obama] used Nebraska as that point of contention, and given that he doesn't have to make a decision until after the election sometime in 2013, if he's re-elected, I think he can say that TransCanada has worked with Nebraska to address any environmental concerns," Loris says.

Meg Handley is a reporter for U.S. News & World Report. You can reach her at and follow her on Twitter at @mmhandley.