The Keystone XL Pipeline saga continues with Indiana Sen. Richard Lugar leading the effort to revive the project. The Competitive Enterprise Institute looks at the union divide that was deepened by President Obama’s decision to kill the job-creating movement of oil from Canada to the Gulf Coast.

Terry O’Sullivan, head of the Laborers’ International Union of North America (LIUNA ), has called Obama’s action "politics at its worst," saying that "once again the President has sided with environmentalists instead of blue collar construction workers." O’Sullivan angrily vowed that "workers across the U.S. will not forget this."

The Keystone project has long pitted the two key Obama constituencies against one another. Green groups agitated against the pipeline over worries of water contamination and other (largely baseless) environmental fears, while many building and trade unions lusted after the thousands of construction jobs the pipeline would create in the United States.

Mark H. Ayers, president of the Building and Construction Trades Department, AFL-CIO has publicly hammered the jobs issue. In a January 18th press release, Ayers voiced the frustration of many union workers, saying "…with a national unemployment rate in construction at 16 percent nationally, it is beyond disappointing that President Obama placed a higher priority on politics rather than our nation’s number one challenge: jobs."

James T. Callahan, president of the International Union of Operating Engineers, agrees, complaining to the Washington Post  that Obama’s decision was "…a blow to America’s construction workers," who are struggling in "the sector hardest hit by the recession."

In his rejection of the pipeline, Obama blamed Republicans for forcing him to meet what the While House deemed an arbitrary deadline. This despite the fact that the State Department has had the application for Keystone since 2008, held 20 meetings on the subject, and produced a gargantuan 1,000 page Environmental Study to assess the possible consequences of the pipeline, which would bring oil from the tar sands of Alberta, Canada, to the Gulf Coast of the United States. As Rep. Joe Barton of Texas ruefully noted, the U.S. "fought and won World War II" in a shorter amount of time.

Besides causing a fissure between the President and some of his key union allies, the Keystone issue has also ruptured the once-strong Green/Labor alliance between environmental and union organizations, and has even pitted union against union. LUINA announced on January 20 that it left the so called "BlueGreen Alliance," citing "Job-killing attacks on the Keystone XL pipeline by some of the alliance’s labor and environmentalist members."

The Alliance describes itself as "a national, strategic partnership between labor unions and environmental organizations dedicated to expanding the number and quality of jobs in the green economy."

While LIUNA has left the Alliance, many unions remain committed to the partnership between the Democratic Party’s two most powerful special interests and staunchly oppose the pipeline. O’Sullivan has called this emerging divide "as deep and wide as the Grand Canyon."

To these unions, the LIUNA President said he was "repulsed by some of our supposed brothers and sisters lining up with job killers like the Sierra Club and the Natural Resources Defense Council to destroy the lives of working men and women."