Keystone XL rejection setting stage for new pipeline deals?

New governments in Alberta and Ottawa will cut energy-based GHG emissions in return for pipelines, market access

Let’s get one thing straight: President Obama’s rejection of the Keystone XL pipeline is not about facts or science. It’s about symbolism and the role he thinks America should play fighting climate change on the global stage.

Keystone XL
President Barack Obama.

Unfortunately, too many of Keystone XL’s supporters have still not gotten the memo. Instead of engaging Obama in a constructive fashion, they keep flailing away with the “facts” from the State Dept.’s many reviews or various studies that show the pipeline would have had little impact on global GHG emissions.

This has been their strategy for the past seven years and it has failed miserably.

Here’s what I’m talking about.

According to CP, Obama’s  litmus test for Keystone XL, which he established in 2013 when he unveiled his second-term climate change agenda, was that it not “significantly exacerbate the problem of carbon pollution.”

Fast forward to 2015 and the looming Paris global climate talks next month. Obama now says he’d have less credibility if he approved Keystone, not because it would hasten climate change, but because that’s what people think about the pipeline. In documents, his administration cited the “broad perception” that Keystone would carry “dirty” oil.

Keystone XL
Jack Gerard, president and CEO of the American Petroleum Institute. Photo: Handout.

Never mind that Obama played a key role in fostering that perception by insisting that Canadian oil sands crude as dirty oil.

“America is now a global leader when it comes to taking serious action to fight climate change,” Obama said. “And frankly, approving this project would have undercut that global leadership.”

There you have it. Shutting down Keystone XL was all about climate change politics. Like it or not, that is the reality within which the American and Canadian energy industry must operate for the foreseeable future.

Do American leaders get it? Judge for yourself.

“Seven years of review have determined the project is safe and environmentally sound, yet the administration has turned its back on Canada with this decision, and on U.S. energy security as well.” – CEO Jack Gerard, American Petroleum Institute.

“After more than seven years of deliberate delay, President Obama today rejected a strongly-supported project that would create thousands of high-paying jobs, ensure a secure long-term source of energy from one of our closest allies, and serve as the cleanest and safest way to bring this energy into our country – according to analysis from his own State Department.” – Lisa Murkowski (R-Alaska), chair of the Senate Energy and Natural Resources Committee.

Keystone XL
David Porter, Commissioner, Texas Railroad Commission.

“This is just one more example of Obama and his radical environmentalist friends taking action that only weakens the US economy and renders us less secure against foreign countries that would do us harm. We must push back on these radical policies and encourage responsible fossil fuel development…” – David Porter, chair of the Railroad Commission of Texas.

Until quite recently, Canadian political leaders were just as rabid as their American counterparts.

Prime Stephen Harper, defeated only a few weeks ago by Liberal Justin Trudeau, poisoned his government’s relationship with the United States by obsessively pushing for Keystone XL pipeline. Conservative ministers were so abrasive on the subject that American administration officials would flee rather than take meetings with them.

And successive premiers of Alberta were no better, flying regularly to Washington to harangue politicians and bureaucrats about Keystone XL. New premier Rachel Notley, elected in May, turned heads when she declined to continue lobbying, arguing that the project was snarled up in American domestic politics and more meetings weren’t going to change anything.

Notley, as it turned out, was right.

Keystone XL
Rachel Notley, Alberta premier.

And she and Trudeau, leading left-of-centre governments with strong anti-oil factions, may be just what is needed to either salvage Keystone XL or advance other pipelines from Canada into the US market. Notley says she spoke to the new prime minister after Obama’s announcement and stressed that oil sands crude needs infrastructure to get to market, both to the US and to Canadian tidewater. According to her, Trudeau agreed.

“The [Keystone XL] decision today underlines the need to improve our environmental record and reputation so that we can achieve our goal of building Canada’s energy infrastructure, including pipelines to new markets,” she said in a statement.

“Canada can be a global source of environmentally responsible energy through better environmental policies, and Alberta will act to help make that happen in partnership with Canada’s new federal government.”

There you have it. Greater market access in return for “environmentally responsible energy.”

Notley has already convened a climate change advisory review and asked for public and industry input. You can bet GHG-reduction in the Alberta oil sands and the transition away from predominantly coal power generation will head the list of recommendations from the review.

And, with the help of the new Liberal government in Ottawa, those changes will be used to lever new pipeline projects.

The deal is afoot.

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1 Comment

  1. Don’t for a second think Notley is good for Alberta oil. Her background is in protesting anything to do with the carbon economy.

    She is extreme left, that even in a Country such as Canada that is fairly left wing.

    Americans who think Obama is left wing… their heads would explode reading the Alberta Governments position on pretty much everything.

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