Don't wait for anyone to offer a toast to President Barack Obama's position on the Keystone pipeline project. Photographer: Pete Marovich/Bloomberg

Obama Needs to Channel Pena Nieto on Keystone

Raul Gallegos is a Bloomberg View contributor, who covers Latin American politics, business and finance. He was a columnist for Reuters and a correspondent for Dow Jones and the Wall Street Journal. He is a graduate of the University of California at Berkeley and Columbia University. He grew up in El Salvador and is based in Colombia.
Read More.
a | A

It is tempting to think of this week's North American leaders' meeting -- or the "Three Amigos'' summit -- as a learning opportunity for U.S. President Barack Obama.

When it comes to an energy agenda, Obama arrived in Toluca, Mexico, empty-handed. In contrast, Canada's Prime Minister Stephen Harper and Mexico's President Enrique Pena Nieto have a very simple one: continue feeding U.S. demand for oil.

A central issue is whether Obama will finally approve construction of the $5.3 billion Keystone XL pipeline that will stretch from Alberta to Texas and will funnel 830,000 barrels a day of heavy oil to U.S. refineries. Harper has put as much effort into getting the pipeline approved as Obama has devoted to slowing the process. Obama continues to kowtow to environmentalists in the face of evidence that the project's pros outweigh its cons.

The U.S. administration's feckless inaction is such that Harper recently reasoned that if Obama won't act, a future U.S. president probably will. As Harper put it last month, the pipeline project "is, in my judgment, a necessary and inevitable victory." Unfortunately, it is a victory Obama seems unwilling to embrace.

If only Obama possessed the political mettle of his Mexican counterpart. In his first year in office Pena Nieto defied Mexico's biggest economic taboo and opened the energy sector to foreign investment after more than 70 years of isolation. He did so in the face of entrenched oil nationalism and persistent protests. That is the type of courage one expects from a leader with vision.

To be sure, Pena Nieto's administration is paying a price for his reformist zeal. Yesterday, almost 1,000 members of Mexico's CNTE teachers union took to the streets in Toluca to protest the meeting and the energy sector's opening. CNTE spokesman Cesar Hernandez voiced the thinking of many Mexicans when he said that those attending the meeting "represent large multinational corporations" and the summit is little more than a forum "to decide how best to divvy the oil riches of our country."

Broadsides from leftist such as Adriana Farias were more hostile: "Barack Obama Go Home'' and "Fascists we don't want you in Toluca!'' she wrote in a Twitter post on Sunday. The following day the leftist academic John Ackerman, warned in a piece published in La Jornada newspaper that the summit would "enhance the plunder of the popular economy."

Opposition to Peña Nieto runs deep. When Time magazine put him on a cover last week with the headline, "Saving Mexico," the reaction was uncanny. Spoof covers ridiculing Pena Nieto (in one of them he appears as the Virgin Mary) became popular in social media. Maricela Rosales, a blogger for the Animal Politico digital newspaper, argued in a post that the president couldn't save her "from a hold up for instance (I've had three in my short life), or from a kidnapping, or from corruption in any of its forms." That may be true, but it may also be short-sighted and misses what he has accomplished: rescuing Mexico from itself.

It may be difficult for Mexicans to appreciate the long-term value of Pena Nieto's energy-reform package. But they will thank him in 10 or 20 years when a viable energy sector does more for the country. It may be equally hard for some Americans to see past Keystone's environmental risks. Yet the benefits to the U.S. of having access to more oil from a friendly neighbor can't be overstated.

If Pena Nieto can defy almost a century of history for Mexico's own good, surely Obama can do the same for his country and approve a pipeline.

(Raul Gallegos is the Latin American correspondent for the World View blog. Follow him on Twitter @raulgallegos.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
James Greiff at