Canadians of every political persuasion should be dismayed by U.S. President Barack Obama’s cowardly rejection of the Keystone XL pipeline.
After seven years of review involving massive documentation, scientific justification and some $3 billion in spending by proponent TransCanada Corp., Obama offered weak and questionable reasons Friday for the denial.
Meanwhile, he betrayed Canada, America’s closest and loyal friend and ally, to feed his vanity project – a climate change legacy he hopes to cement at the UN climate summit in Paris in the coming weeks.
As Obama put it in his eight-minute statement from the White House after conveying the decision to a disappointed Prime Minister Justin Trudeau: “America is now a global leader when it comes to taking serious action to fight climate change, and frankly approving this project would have undercut that global leadership.
“Three weeks from now I look forward to joining my fellow world leaders in Paris when we come together around an ambitious framework to protect the one planet we got while we still can.”
Aside from furthering his climate change ambitions, Obama highlighted three reasons for ruling the Alberta-to-U.S. Gulf pipeline project would not serve the U.S. national interest: Keystone XL would not make a meaningful long-term contribution to the U.S. economy; Keystone would not lower gasoline prices for U.S. consumers, and shipping “dirtier crude” oil into the U.S. would not increase America’s energy security.
As Jack Gerard, president of the American Petroleum Institute, put it: “It’s politics at its worst.”
In fact, Keystone XL would have created 42,000 construction and related jobs and is widely supported by labour organizations. Some 2,400 U.S. companies supply goods and services to Canada’s oil sector, and the U.S. is second only to Canada in corporate control of oilsands production — 56 per cent Canada, 30 per cent U.S., 10 per cent Europe, five per cent Asia.
Gasoline prices are already lower thanks to a surge in North American production – from Canada’s oilsands and from U.S. tight oil, despite Obama’s loathing of fossil fuels. KXL would have helped keep them that way by reducing transportation costs.
By linking Canada’s oilsands, the world’s safest oil deposits, to refineries in the U.S. Gulf that desperately want it, KXL would have made the U.S. more energy secure. Indeed, it’s that new oil abundance that’s scared the OPEC cartel into waging a price war to claw back its market share.
The rejection reeks of hypocrisy. Obama is turning his back on Canada’s oil while making a deal with Iran that enables it to push its oil in the global market, undermining North American supplies.
Keystone XL would actually reduce greenhouse gas emissions by carrying oil that is now going on trains, making Obama’s symbolic gesture look like cheap political theatre.
And let’s not forget the many pipelines approved and built in the U.S. while Obama was dragging his feet on KXL.
“The Keystone XL pipeline deserved to be approved on the facts of its environmental, economic and energy security merits,” said Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers. “Comprehensive U.S. reviews found Keystone XL will cause no substantive change in global GHG emissions or other undue environmental impacts.”
Canada is the only major supplier of oil to the U.S. that even has GHG rules. Mexico, Nigeria, Saudi Arabia, Iraq, Venezuela don’t.
The rejection reeks of hypocrisy. Obama is turning his back on Canada’s oil while making a deal with Iran
Indeed, IHS Energy, the global energy consultancy, said the No. 1 beneficiary of Obama’s decision will be Venezuela and other heavy oil producers that ship to the Gulf Coast by tanker. “Venezuela heavy crude is similar to oilsands in both quality and greenhouse gas intensity and will continue to be consumed by U.S. refineries in the absence of access to Canadian crude oil,” said IHS vice president Jim Burkhard.
Even Rachel Notley, the left-leaning Alberta premier who plans to deliver a real GHG reduction policy this month, was disappointed by Obama’s continuing characterization of the province’s oil exports.
“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,” she said. “And then we hope that future energy infrastructure projects will be debated on their own merits.”
The denial presents a challenge for Prime Minister Justin Trudeau, who supports KXL but also wants to improve relations with the U.S.
Obama showed zero interest in Canada’s overtures for a joint energy and climate change strategy during his seven years in power.
Now that he’s sacrificed KXL and that Conservative Stephen Harper is out of the picture, Obama is keen to make friends.
In his statement, Obama said senior members of his team would engage with their Canadian counterparts to deepen energy and climate change cooperation.