Obama Punts Keystone XL (Again) — Harper Learns a Lesson in Humility (Maybe)

“If you were a betting man (or woman) what odds would you place on President Obama approving the Keystone XL pipeline before the end of his term and why?”

Ms Soapbox posed the question to a panel* discussing the future of Alberta’s energy industry. The panelists, bless their hearts, didn’t leave the stage en masse…partly because Ms Soapbox was the moderator and had control of the agenda.

Instead this group of economists, politicians, academics and businessmen pegged the odds between 25% to 80%; with a higher chance of approval based on Mr Obama holding off on a decision until the mid-term elections were safely out of the way.

Given our understanding of the USA’s desperate need for energy security and job creation projects how did Keystone XL turn into a political football?

Small decisions; huge impacts

The fate of Keystone XL is uncertain because of decisions taken by the Harper government and TCPL—decisions that created tremendous public resistance. Like a Chinese finger trap, the harder Harper and TCPL fought to overcome this resistance, the tighter the trap became. Let’s review the timeline:

Sept 2008 – TCPL applies for a presidential permit to build a pipeline to carry bitumen across the Canada/US border for delivery to refineries on US Gulf Coast.

May 2011 – Harper wins a majority government. Recognizing Canada’s potential to become an energy super power he begins an aggressive campaign to get Keystone XL approved. His strategy is based on his belief that the USA’s need for energy security and job creation trumps environmental concerns. Mistake #1.

Ogallala aquifer

Aug 2011 – Nebraska Governor Dave Heineman is deluged by complaints from farmers, ranchers and environmentalists who want the pipeline rerouted to avoid the Ogallala aquifer in the Sandhills region. The Ogallala supplies drinking water for 2 million people in eight states and irrigates almost half of Nebraska.** Governor Heineman supports their position and asks Obama to refuse the permit.

Oct 2011 – TCPL meets with four Nebraska senators but refuses to budge because it is “impossible” to reroute the pipeline to avoid the aquifer at this late date. Mistake #2.

Nov 1 2011– Nebraska grants itself the power to block the pipeline.

Nov 5, 2011TCPL decides it’s not impossible to reroute Keystone after all (surprise) and agrees to develop an alternate route.  Nebraska Governor Heineman is happy but the reroute will require further environmental review.

Nov 10, 2011 – Obama advises Harper that his decision is delayed due to the situation in Nebraska, a pro-pipeline state run by a pro-pipeline governor.

Nov 2011 – Harper says he won’t take “no for an answer.” He redoubles his lobbying efforts and unleashes a multimillion-dollar ad campaign to bring Obama to his senses.

Dec 2011 – Harper pulls Canada out of the Kyoto Protocol.

Jan 2012– Obama advises Harper that the Republicans attached a rider to a tax bill demanding a decision on Keystone within 60 days. Since 60 days isn’t enough time to conduct proper assessment of TCPL’s alternative route through Nebraska Obama has no alternative but to turn it down.

Jan 2012TCPL reapplies for a permit and receives a positive environmental review from the State Department, but by now Nebraska’s authority to approve the revised route is before the courts.

Nov 2012 – Obama is re-elected.

Apr 2014Obama advises Harper that his decision will be delayed pending the outcome of the Nebraska court case which is (coincidently) not expected to be handed down until after the Nov 2014 mid-term elections. Keystone is in limbo.

Lessons learned?

The Harper government dismisses Obama’s inaction as “purely political” stalling. Joe Oliver, Finance Minister, blames the delay on well funded environmentalists who have the President’s ear.

TCPL executives blame BP and Enbridge, arguing that the BP Deepwater Horizon blowout in the Gulf of Mexico and Enbridge’s spill into the Kalamazoo River in Michigan mobilized well funded environmentalists who made Keystone XL the whipping boy in an anti-oilsands, anti-fossil fuels campaign.

Get real. Public opposition to pipelines (and the bitumen they carry) comes from all quarters, not just “well funded environmental groups”. In BC entire towns voted against Enbridge’s Northern Gateway pipeline. The Dogwood Initiative, an environmental group, is considering triggering a province wide referendum, à la the HST referendum, to decide whether Northern Gateway should proceed, despite the fact that it’s been blessed by the regulator.

President Obama’s refusal to be pressured into approving Keystone XL demonstrates that social values (including the protection of the environment) must be balanced with the economic benefits created by pipeline approvals.

Prime Minister Harper needs to move ahead with his promise to enact rigorous environmental regulations. Industry needs to do more than give lip service to the consultation process if it hopes to avoid the embarrassing predicament TCPL created for itself when it agreed to reroute Keystone XL a mere four days after it said a reroute was “impossible”.

All pipelines are political footballs. The best way through the political minefield is to adopt the advice of the US ambassador to Canada, Bruce Heyman, who said “Today you can be pro-economy and pro-energy and considerate of the environment”.***

You can indeed…but first you need to develop a little humility and learn from your mistakes. Over to you Mr Harper.

*David Daly, Peter Linder and Dr Jennifer Winter, MLA Donna Kennedy-Glans, MP Geoff Regan and Dr Marlo Raynolds participated in a lively energy forum presented by the Calgary Centre Federal Liberals

**McClatchy DC Online Feb 13, 2011

***Calgary Herald, Apr 9, 2014, D1

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13 Responses to Obama Punts Keystone XL (Again) — Harper Learns a Lesson in Humility (Maybe)

  1. Mare Donly says:

    Thank you, thank you, thank you! This was just what I needed to relieve my frustrations after reading the Calgary Herald’s editorial pages. You said, more eloquently than I, and with no expletives, exactly what I was arguing back in my head to the nonsense you cited above.

    • Thank you Mare! The nonsense I find particularly disturbing is the double standard implicit in blaming the “well funded environmentalists” for the delay in approving Keystone XL. Apparently it’s OK for the well funded Harper and Alberta governments and oil and pipeline companies to lobby Obama, the US government agencies, state governments and the general population to press for approval but it’s not OK for well funded environmentalists to do the same. In a democracy all citizens have a voice and in the system as it exists today, the voice that gets heard is usually “well funded”.

      • Mare Donly says:

        Exactly, and one is using tax dollars to lobby – talk about “well-funded!” I was just reading about the “Cowboy & Indian Alliance,” who marched in DC a week or so ago. These old ranchers and indeed the indigenous contingent, could hardly be stereotyped as “well-funded environmentalists,” but instead are people genuinely concerned about the land that they’ve been tied so closely to for generations.

      • Carlos Beca says:

        Well Susan congratulations on this answer. This is absolutely correct. The media and politicians call the business ‘well funded’ lobbying – consultants and the well funded environment groups – eco-terrorists. This is disgusting and very undemocratic.
        The Canadian government, along with the mainstream media is distorting the Keystone pipeline issue. If this pipeline was crucial for the American economy they would have already approved it a long time ago. The fact is that they no longer need our oil. Their renewal resource industry is growing by leaps and bounds and they are realizing that it creates way more jobs than the construction of a pipeline. Furthermore they are fracking as if there is not tomorrow. Apparently they have as much oil available as we have in Alberta. Americans are not known for refusing a good business deal!!!!

      • Carlos, I was talking with someone today who said that the International Energy Agency (IEA) said that the US could achieve energy self-sufficiency within five years. The IEA acknowledged that this was a very optimistic forecast, but even if the real time line is double that, it’s obvious from the Keystone XL example that rushing the front end of the process will catch you at the back end. Just think how much farther ahead TCPL would have been had it engaged in meaningful consultation with all of the concerned parties in Nebraska and routed the pipeline to avoid the aquifer and the Sandhills from the get-go.

        Correction: my friend says that it wasn’t the IEA but industry forecasters who made this statement. She’s sent me some additional material with which I’ll update this comment.

      • Carlos Beca says:

        Susan I do not know about 5 years but I would not be surprised. If you look at the bulletins from the Earth Policy Institute (Lester Brown) you will see that the US has not been sleeping under the tree. The republicans may think that renewable resources are a waste of money but they are just part of the whole US picture. The very latest one is about what we are discussing here but it is not published at the site yet. Unfortunately I got rid of it but I think that maybe later I can get it and I will post it here.

        This one is also very interesting.
        Lester Brown is not known for being too positive about the environment in general so these bulletins sound great when you take that in consideration.

        http://www.earth-policy.org/plan_b_updates/2013/update117

        The US has a major advantage over us and that is the fact that to most Americans, the US interests are first. We on the other hand seem to believe that by allowing anyone to come in and take whatever they please as long as they create jobs, everything is okie dokie. I am not sure when we developed this bad character trait but after living in different countries I was amazed at our just ‘who cares?’ atittude. Those that care even a bit are labelled nationalists and commies. I very often get the bad looks when I say that Canadian land should only be owned by Canadians or people permanently living in Canada. This idea of especially foreign governments buying land here is another problem for the future.
        I totally agree with you about TCPL but they think that confrontation is way better and they do not negotiate with eco-terrorists or the First Nations. Why bother, in 90% of the cases they overrun everyone anyway, or they use to. 🙂

      • Carlos, I’ll come back to you on this…my friend has given me more information. Apparently it wasn’t the IEA but industry forecasters who made the aggressive prediction of 5 years to self-sufficiency.

  2. david swann says:

    thoughtful analysis as always touching on the common-sense human relations impacts.
    equally clearly is the failure of meaningful consultation, especially with First Nations, which must include adequate time, experts, respect for Treaty and non-treaty rights, and accommodation of FN interests.
    interesting that the same self-interest operates at the highest, and the lower political levels!

    • Excellent point David. Someone once told me that it’s not meaningful consultation when you end the consultation with exactly the same plan you had at the beginning. TCPL’s refusal to reroute Keystone to avoid the aquifer (and the Sandhills which are extremely sensitive environmentally) demonstrates a lack of respect for the consultation process. Your comment about FN consultation requiring adequate time and an understanding of Treaty and non-treaty rights adds another layer of complexity that the government and industry need to take into account if they hope to have any success.

  3. Joe Simon says:

    Susan,
    If the bitumen was refined in Alberta there would be much less resistance to the pipelines. Why cannot this be done?

    • Joe you’re absolutely right. Bitumen can be fully or partially upgraded in Alberta. However oil producers are reluctant to plunk down the billions of dollars needed to build an upgrader here because they already have upgraders on the US Gulf Coast. They’re global players who make financial decisions on a global basis. However, we haven’t elected the government to focus solely on what global oil companies want; the government should also consider what’s best for Albertans. Peter Lougheed was the first to recognize the importance of “value added” Alberta based industries, it’s a crying shame that his successors don’t have his vision.

      Interestingly the Irving family from New Brunswick is more than willing to build an upgrader in New Brunswick at the end of the Energy East pipeline.

  4. mdentremont says:

    Dec 2011 – Harper pulls Canada out of the Kyoto Protocol. Mistake #3?

    • Martin, you’re absolutely right…pulling out of Kyoto did not signal a respect for environmental issues but the opposite. Interestingly for all our talk about Alberta being one of the first provinces to impose a carbon tax ($15 per tonne for large emitters who fail to reduce their emissions by 12% below baseline emissions) the carbon tax expires on Sept 1. The Environment Minister, Robin Campbell, is working with industry and the Harper government to set a new tax (apparently Alberta doesn’t want to get ahead of the feds because…well because). Unfortunately discussions with the feds are going slowly and “an announcement is not imminent”. See: http://www.calgaryherald.com/news/politics/Alberta+nears+deal+raising+carbon+heavy+emitters/9550784/story.html

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