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Canada to US: We Need Keystone


Late last week Canadian Prime Minister Stephen Harper reportedly wrote to President Obama with an offer to draw up a joint emissions reduction plan in exchange for White House approval of the Keystone XL pipeline. The offer was followed up by a visit from Canada’s top energy official Joe Oliver, who informed reporters after meeting with US Energy Secretary Ernest Moriz on Monday that “Canada wants to work with the U.S. administration on…collaborative efforts to reduce greenhouse gas emissions from the development of North American conventional and nonconventional oil and gas reserves.”

The fight over the pipeline, which would connect Canada’s vast reserves of heavy-emitting oil sands bitumen with America’s Gulf coast refineries, has become one of the biggest environmental fights over the past couple of years. Ryan Lizza penned an excellent overview of the issue for this week’s New Yorker. He describes a fight between two very well-funded sides: the pro-pipeline crowd, which draws from the coffers of the oil industry, and the environmentalists opposing it, backed by hedge-fund billionaire Tom Steyer. Much of the article focuses on Steyer’s unlikely path to becoming a “leader of the environmental movement,” but Lizza is careful not to choose sides himself. Instead, he paints a fairly detailed picture of the problem Keystone poses for President Obama, as well as the wedge the project has driven between the EPA and the State Department. From Lizza’s report:

Lisa Jackson, frustrated by Obama’s inaction on climate change, left the E.P.A. in February. In April, the agency, under attack by congressional Republicans who were delaying the confirmation of its next administrator, Gina McCarthy, scrambled the Keystone debate: it challenged the State Department’s analysis of the oil market, suggesting that Canada might find it difficult to ship its oil without Keystone. “We think it is important that it be as complete and accurate as possible,” the E.P.A. assessment noted, adding that the State Department’s report, “while informative, is not based on an updated energy-economic modeling effort.” The fate of Keystone now depends on the outcome of this bureaucratic fight. “If State sticks with its original analysis, Keystone will probably be approved,” a former State Department official said.

President Obama tipped his hand in his climate change speech back in June: Keystone will get its permit only if it, in the President’s own words, “does not significantly exacerbate the problem of carbon pollution.” In a draft report back in March, the State Department determined that Alberta’s oil would be extracted whether or not Keystone was built, meaning the pipeline wouldn’t have an effect on emissions. The pipeline’s future could rest on the decision of that final report.

But Canada doesn’t seem willing to sit back and wait for the US State Department; indeed it seems willing to meet the US halfway to win approval for Keystone. Harper’s letter and Oliver’s visit underscore how important this project is to Canada’s economy and energy security. The needs of America’s biggest trading partner are hard to ignore.

[Pipeline image courtesy of Shutterstock]

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