Pipeline Politics
Keystone Poisoning US-Canada Relations

Congress isn’t alone in its frustration at the Obama administration’s continued inaction (and in some cases deliberate intervention against action) on the controversial Keystone pipeline. Our northern neighbor is fed up with the interminable delays of the project, which would connect Albertan oil sands with Gulf Coast refineries. The FT reports:

Mr Obama has not issued a final ruling on the pipeline but he has been increasingly vocal in his scepticism about its merits. While Keystone has gained the most attention, there are other disputes. Mr Harper recently said Canada was “prepared to retaliate” unless Washington responded to a World Trade Organisation ruling that US laws requiring meat products to show the country of origin broke global trade rules. […]

Amid tensions over Keystone, observers in Ottawa say Mr Harper’s team has sometimes made it difficult for Bruce Heyman, the former Goldman Sachs executive who became US ambassador last year, to get meetings with cabinet ministers.

This is an important but often forgotten (or at least rarely mentioned) effect of all this waffling on the pipeline. Earlier this year, as part of a string of comments indicating his skepticism about the project, President Obama cautioned that the pipeline would not benefit the United States (a statement that earned him an ignominious four Pinocchios from the Washington Post). Not only was that bit of rhetoric factually incorrect; it also suggested a lack of regard for the pipeline’s importance for Canada.

The U.S. and Canada are still cooperating with national security and foreign policy issues (Harper’s spokesperson cited border control and Ukraine as prominent examples of each), but energy security is still a high priority, and to that end Keystone could be very helpful for Canadian oil sands producers.

And yet the President seems inclined to value the specious arguments of a portion of his political base over the needs of America’s most important trading partner.

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