Analysis: Pipeline delay gives Obama political space with base

U.S. President Barack Obama delivers remarks at the National Women's Law Center's Annual Awards dinner in Washington November 9, 2011.

WASHINGTON (Reuters) - The move to delay a decision on a new oil pipeline from Canada may bolster support among President Barack Obama's liberal-leaning base in 2012 and help offset Republican criticism of his job-creation record.

The State Department said on Thursday it would study a new route for TransCanada Corp's Canada-to-Texas Keystone XL pipeline, delaying a decision to approve or reject until 2013, well after the presidential election in November 2012.

That delay, which came in the wake of large protests by environmentalists, gave Obama and his re-election campaign relief from threats by core supporters they would stay clear of his re-election effort next year.

"Yesterday's announcement ... took a lot of courage and it's that kind of courage that gets people up off the couch, pushes people to go down to campaign offices and volunteer," said Michael Brune, executive director of the Sierra Club environmental group.

The organization, which has 1.4 million members and supporters, said previously a decision in favor of the project would dent enthusiasm among its membership to campaign for the president.

Obama's political advisers took that threat seriously. Although the White House denied that political factors influenced the delay, the outcome reduced concerns the topic would continue making headlines in the middle of a tough re-election campaign.

"He will have to address the issue less, which is what he wants to do," said Hunter College political science professor Kenneth Sherrill.

Labor groups, another key constituency for Obama, a Democrat, were split over Keystone but the issue is unlikely to dent their support for him.

Leading labor organizations such as the AFL-CIO stayed neutral on the topic, with construction unions arguing in favor of it and transportation union groups arguing against it.

Republican efforts to reduce union power were poised to resound more forcefully with that constituency, as illustrated in Ohio this week, when voters rejected a Republican-sponsored law that would have limited bargaining rights for police, firefighters, and other state workers.

PITFALLS

The Keystone XL decision had political pitfalls for the president either way. Saying yes threatened to hurt his support among the young voters who helped propel him to power in 2008.

Saying no meant turning down a chance to increase oil imports substantially from a friendly neighbor and halt a project proponents say would create thousands of jobs.

The administration split the difference, choosing a delay that allows the president to say he will address activists' concerns, while not shutting down the potential for the project and the jobs associated with it to go forward.

Republicans signaled they would use the decision to bolster their argument that Obama's record on job creation had been poor.

"President Obama's decision to punt on the Keystone pipeline is more evidence that he would rather campaign to save his job than be a leader to create jobs," said Kirsten Kukowski, spokeswoman for the Republican National Committee. "Obama is more worried about making safe decisions as to not anger any of his liberal constituencies than creating jobs."

But environmentalists said their support would make up for that criticism, even if the oil industry used the issue as motivation to fund Republican candidates.

"It'll spur Big Oil to probably reach deeper into their pockets to fund the president's opponent," the Sierra Club's Brune said. "We can't compete with that money, but we have millions of people who care deeply about these issues, and we'll be making sure that they're fully engaged in the election next year."

Some "green" supporters said, however, they would keep up the pressure on Obama.

"Obama's going to need every vote he can get from his base, and this Keystone decision will help -- but it's not the 'be all and end all,'" said Ed Chen, a spokesman for the NRDC Action Fund, an affiliate of the Natural Resources Defense Council.

He said upcoming administration decisions on regulations for power plants would also be watched closely.

"We expect that he'll do the right thing as he did on Keystone," Chen said.

(Editing by Peter Cooney)