By Sarah O’Donnell, Edmonton Journal June 25, 2013
EDMONTON – U.S. President Barack Obama clearly tied the fate of the proposed Keystone XL pipeline to its impact on greenhouse gas emissions in a major speech Tuesday laying out a plan for his country to fight climate change.
Obama’s new national climate change strategy could have wide ranging implications for Alberta and Canada’s own efforts to reduce greenhouse gases. But the immediate focus here Tuesday was on its implications for TransCanada’s $5.3 billion pipeline proposal, expanding capacity for Alberta bitumen to reach the U.S. Gulf Coast for refining.
Keystone has become a flashpoint for environmental groups wanting to slow the pace of oilsands expansion to fight greenhouse gas emissions and protect against spills. In the face of that opposition, Canadian leaders, including Premier Alison Redford, have devoted much effort to selling the project and the province’s environmental credentials.
Obama singled out the pipeline project about halfway through his speech, saying a U.S. energy strategy must be about more than just producing oil. “It’s certainly going to be about more than just building one pipeline,” he said to the audience listening in the hot sun at Georgetown University in Washington, D.C.
“I know there’s been, for example, a lot of controversy surrounding the proposal to build the Keystone pipeline, that would carry oil from Canadian tar sands down to refineries in the Gulf,” he said.
Keystone will only get a green light if the U.S State Department thinks the project serves the nation’s interests, he said to applause, which means it must not significantly “exacerbate the problem of carbon pollution.”
“The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It’s relevant,” he said.
Like almost every other discussion related to Keystone, reaction to Obama’s comments was sharply divided. Energy industry representatives, including TransCanada, said they believe the pipeline will meet Obama’s criteria. But environmental groups said they believe it will fail the greenhouse gas test.
Alberta officials have worked hard in recent years to sell U.S. decision-makers on the pipeline, which is viewed as a critical piece of infrastructure with a capacity of 830,000 barrels a day that would help reduce the oil glut and potentially increase the price Alberta gets for its oil relative to the North American benchmark.
Redford and Alberta’s Energy Minister Ken Hughes were unavailable to comment Tuesday as they focused on southern Alberta’s flooding crisis. International and Intergovernmental Relations Minister Cal Dallas said in a written statement the province welcomed Obama’s new climate change policy. “Americans should feel confident that Alberta is the safest, most secure and responsible energy supplier to the United States,” he said, adding that the province is committed to carbon reductions.
Dallas, and federal Natural Resources Minister Joe Oliver, pointed to the U.S. State Department’s draft environmental impact assessment released in March that said the pipeline expansion would have little impact on the growth of Alberta’s oilsands and its associated greenhouse gas emissions.
Oliver said at a televised press conference after Obama’s speech that he does not consider it “a given” that Keystone will be approved. “I just think again if you look at the facts and the science, we’re comfortable the project will be approved,” Oliver said.
TransCanada, the company at the centre of the debate, said in a statement Tuesday it believes the pipeline complies with Obama’s criteria. Like government officials, spokesman Shawn Howard pointed to the State Department’s draft review.
“These reviews have found that, from a global perspective, the decision whether to build the proposed project would be unlikely to substantially affect the rate of extraction or combustion of Canadian oilsands crude and its global impact,” Howard said. “If Keystone XL is not built, it’s clear that the oil will move by market, by truck, rail and tanker, which will significantly add to global greenhouse gas emissions to move the product.”
But environmental groups such as Greenpeace Canada and the Sierra Club said Obama’s decision to make greenhouse gas the litmus test for Keystone should make it easy for him to reject the pipeline.
“If President Obama is going to be following the signals that he gave today, denying Keystone XL would be a very measured and cautious approach to addressing climate impacts,” said Nathan Lemphers, a senior policy analyst with the Pembina Institute.
Based on his analysis of the climate impacts of Keystone, presented on behalf of the environmental think-tank in Washington earlier this year, Lemphers said estimates filing the Keystone pipeline with oilsands bitumen will require a 36 per cent increase in production from today’s levels.
“That’s the equivalent of putting over four million cars on the road,” he said. “That’s not inconsequential.”
Alberta NDP leader Brian Mason said he thinks Obama’s speech Tuesday points to trouble for the pipeline. “I think that is not good news for Alison Redford, who desperately wants this pipeline to be approved,” Mason said.
Wildrose MLA Joe Anglin, the party’s environment critic, said he thinks Keystone may still be approved, but said Alberta must do more to prove it is making real improvements reducing carbon. “This government has not made anybody, including the Obama administration, convinced of their efforts,” said Anglin.
After weighing Obama’s comments, Greg Stringham, the Canadian Association of Petroleum Producers’ vice-president of oilsands and markets, said he believes Obama’s speech is another step toward Keystone’s ultimate approval when considered in conjunction with the State Department draft environmental review.
“It’s still a political decision so we’re looking for certainty and we’re hoping it will be sooner rather than later,” Stringham said. “But as we look at the process through this, as the State Department is working on their final environmental impact assessment, we don’t see anything that would have changed the conclusions they came up with in March.”
Obama is expected to make a final decision on Keystone by the end of the year.
