For years, the conventional wisdom in Washington has been that President Barack Obama will approve the Keystone XL oil pipeline — reasoning that the political upside of embracing the North American energy boom will outweigh outrage from environmentalists.

But that wisdom could be wrong.

Sure, the Canada-to-Texas project is riding some strong political tailwinds, including its potential for aiding vulnerable oil-state Senate Democrats in November, support from Democrat-friendly unions and a series of State Department studies that found the pipeline wouldn’t dramatically worsen climate change. But the political case for approving Keystone is far from airtight, and the drawbacks could be significant.

Green-minded Democratic donors are dead-set against Keystone, people who have Obama’s ear are divided, and the inevitable GOP attacks that would come from rejecting the project would be nothing new for this White House — and could be quickly muted by the noise of a fast-moving news cycle. Plus, killing the pipeline would allow the president to claim at least a symbolic victory on climate change, an issue he has identified as crucial for his legacy.

People close to the White House say the president isn’t tipping his hand. But he’s expected to render a verdict in the next few months after more than five years of extended State Department reviews.

Obama’s public comments and his reported behind-closed-doors remarks indicate that he thinks the pro- and anti-Keystone camps, respectively, are exaggerating the pipeline’s job-creation potential and environmental dangers. Still, rejecting the pipeline would fit with the increasingly liberal turn Obama has taken on other issues, such as entitlement spending, and it would delight progressive policymakers like John Podesta, whom the president has brought in as a special White House adviser.

“When I look at those people he has around him, I think from a purely political perspective, he’s probably being told, ‘What do you gain from this right now?’” said Charles Ebinger, director of the Energy Security Initiative at the Brookings Institution, who had long thought Keystone would be approved.

Here are several reasons the president might think twice about the project:

Obama’s climate legacy

The president has made it clear he sees climate change as a legacy-defining issue. Failing to tackle it, he warned in his second inaugural address, “would betray our children and future generations.”

And a place in the history books is important for any president looking toward the end of his second term. “At the end of the day we’re part of a long-running story,” Obama told The New Yorker’s David Remnick in November, musing about the decisions Abraham Lincoln made during the Civil War. “We just try to get our paragraph right.”

While Obama’s own State Department has said approving Keystone wouldn’t be a death knell for the climate, environmental groups have succeeded in framing the issue in terms of the fate of the planet. They’ve staged protests and mass arrests outside the White House and have told the president that his paragraph in history hangs in the balance.

League of Conservation Voters President Gene Karpinski said he thinks the anti-Keystone activism is working.

“We remain cautiously optimistic that the president will reject the pipeline in particular because both he and Secretary of State John Kerry continue to elevate the importance of the climate change challenge,” he said. “He’s made that the critical test of whether to approve the pipeline, and rejection would send the clear signal that he’s serious about leaving the fossil fuels in the ground.”

But Karpinski warned that tens of thousands of activists are prepared to engage in civil disobedience if the president approves the project.

“This will not be a one-day story,” he said. “It will be a continuing challenge, and it will be a permanent stain on his climate change legacy.”

Big-money Democrats,

Some of the country’s wealthiest Democratic donors — including billionaire climate activist Tom Steyer — are spending millions of dollars to defeat the pipeline.

Steyer, who has hosted both Obama and Senate Majority Leader Harry Reid at his San Francisco home for fundraisers, has made killing Keystone one of his top priorities while also ingratiating himself with the Democratic Party establishment. He is planning to spend $100 million or more to make climate change a major issue in this year’s elections.

Others have followed suit. More than 150 wealthy Democratic donors and Obama supporters — including tech guru Vinod Khosla, CREDO Mobile co-founder Michael Kieschnick and Susie Tompkins Buell, co-founder of the Esprit clothing company — wrote to the president last year pressuring him to reject the project.

Democrats are relying on many of these donors for cash heading into the midterm elections, even as vulnerable Democratic moderates like Louisiana Sen. Mary Landrieu and Alaska Sen. Mark Begich openly support the pipeline. (Begich told POLITICO recently that rejecting Keystone would be a “foolish mistake.”)

Polls show that the majority of wealthy, college-educated Democrats have concerns about the pipeline. A recent Pew Research Center survey found that 51 percent of Democrats with family incomes of $100,000 or more oppose the project, while 36 percent support it. Fifty-one percent of those with a post-graduate degree also oppose Keystone.

But polls also consistently find that the pipeline is relatively popular with the public as a whole. The Pew poll showed that 61 percent of people favor Keystone and just 27 percent oppose it.

The GOP has already started targeting Steyer as the Democratic equivalent of the Koch brothers, the Republican-supporting industrialists whom Reid and other liberal lawmakers have railed against for spending big to influence elections. If Obama rejects the pipeline, Republicans are certain to paint the move as a gift to Steyer.

But the administration is used to that kind of GOP criticism, having weathered lengthy Republican investigations into charges of “cronyism” surrounding the $535 million loan guarantee to failed solar company Solyndra.

Obama doesn’t have to look beyond his senior staff to find Keystone opponents.
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Podesta, who joined the administration as an adviser earlier this year and focuses much of his attention on climate change, was highly critical of the pipeline during his time heading the liberal Center for American Progress. He has recused himself from dealing with Keystone — but his opposition is no mystery to the president.

Valerie Jarrett and Dan Pfeiffer have also privately said they oppose the pipeline, according to Bloomberg.

But others in Obama’s web favor the project. Former Interior Secretary Ken Salazar recently said he supports the pipeline, as did Marcia McNutt, who formerly headed the U.S. Geological Survey under Obama. One of his past national security advisers, Gen. James Jones, told Congress that approving Keystone is especially crucial for boosting energy security in light of rising tensions with Russia.

It’s unclear where some of Obama’s other top advisers stand, including chief of staff Denis McDonough, who dodged questions about Keystone earlier this year. McDonough, a longtime foreign policy and national security wonk, is likely to weigh considerations such as the impact of a rejection on the country’s relationship with Canada.

The most crucial mystery may be Kerry, who must make a recommendation to Obama on whether the pipeline is in the national interest. Kerry has never taken a public position on Keystone, including when he was Senate Foreign Relations chairman, but he’s an outspoken climate advocate who said in a speech in Indonesia in February that “every nation on Earth has a responsibility to do its part.”

The final verdict may depend on which Obama shows up on decision day. Will it be the Obama who has embraced the U.S. oil and gas boom, even delivering a 2012 speech in an Oklahoma pipeline storage yard owned by Keystone developer TransCanada? Or will it be the president who has pushed even harder for limits on greenhouse gas emissions?

The timing question

Another consideration is when to make a decision.

A verdict before the midterm elections, especially a rejection, could affect Landrieu and other vulnerable pro-Keystone Democrats. Then again, dragging it out even longer could look like a nakedly political calculation.

“Given the polling and how high the public support for the project is, I think denying the permit before the midterm elections would be bad politics,” said Paul Bledsoe, a former Clinton White House climate aide who’s now at the German Marshall Fund. “Maybe they put it off until after the midterm, but it still would probably be bad politics.”

Obama also may not want to anger key donors like Steyer ahead of the election if he approves the project.

“I still would be surprised if he did anything before the congressional elections. I don’t see what he gains politically, particularly with some very tight races,” Ebinger said. “Not that his environmentalist base is going to vote against Democrats. But he doesn’t want people to stay home either.”

The degree to which a Keystone decision would weigh on the midterms is unclear. It would certainly get high-profile attention from some candidates, but issues like Obamacare — a major focus of the Louisiana Senate race, for example — are likely to remain in the spotlight.

One environmentalist close to the White House said the midterms are probably not going to be a major factor in determining when to make a decision.

Some Keystone watchers privately suggested Landrieu could benefit if Obama kills Keystone because it would allow her to draw a clear distinction between herself and the president.

But some of the pipeline’s supporters are pessimistic about a decision coming anytime soon, noting that the administration has been reviewing it for more than five years.

“He doesn’t have to reject it. He only has to avoid approving it,” said Mike McKenna, a GOP energy strategist and lobbyist. “I have seen zero evidence that the administration intends to approve it.”

Many in Washington remain convinced that Obama will greenlight the pipeline, pointing to a series of State Department environmental analyses finding it would probably not have a major impact on greenhouse gas emissions. Bledsoe said he thinks the president will “approve Keystone while holding his nose a bit.”

Sen. John Hoeven (R-N.D.) said Keystone will win approval, even if Congress has to step in.

“On the merits, I think ultimately [Obama] will be forced to approve it. However, if he doesn’t, I think that we are building enough support that we’ll be able to do it congressionally,” Hoeven told POLITICO. “If we don’t get it done before November, then we’ll get it done after November.”