The U.S. and Canada: we used to be friends - Macleans.ca
No one was more surprised than TransCanada PipeLines Ltd. itself by the Obama administration’s decision to impose a fresh year or more delay on a permit for the Keystone XL pipeline—TransCanada’s proposed 2,673-km project that could transport more than 700,000 barrels of crude oil from the oil sands in Alberta to refineries in Oklahoma and the Gulf Coast of Texas. It had been heavily promoted by the governments of Canada and Alberta. And after two years of studies and drafts, the U.S. State Department had issued a final environmental assessment on Aug. 26 that had turned out to be even friendlier to the pipeline than supporters had been hoping for.
Indeed, the State Department concluded that there are “no significant impacts” to the environment along the route of the pipeline. The department also concluded that the pipeline would fill a need: even under a “low demand” outlook for oil, and even if there was increased fuel efficiency and a greater use of alternative energy sources, the hunger for Canadian crude oil would continue to grow among Gulf Coast refineries because supplies from countries such as Mexico and Venezuela are declining. Alternative transportation methods, such as trucking or rail, would add more emissions and run a higher risk of accidents than a pipeline. The project would not increase greenhouse gas emissions, State reasoned, because the oil would be produced for somebody to use in any case. And State also looked at 14 alternative routes and decided that none of them was preferable to the one proposed by TransCanada.
Then, little more than two months later, on Nov. 10, the State Department abruptly balked and declared the need for an additional study—one that would take a year or more—to look at an alternative pipeline route within the state of Nebraska that would avoid the Sand Hills area. That is a region of grass-covered sand dunes that covers a quarter of the state—and also Nebraska’s Ogallala aquifer, one of America’s largest underground sources of fresh water. The study is expected to delay a permit decision, which State had said would come by the end of December, until 2013. Had the project been approved on schedule, it could have started operating by then; the delay will push final approval for the project past the presidential election.
TransCanada was stunned. “We actually found out about it after others did,” company spokesperson Shawn Howard told Maclean’s. “It was a surprise. We thought the conclusions reached in the final environmental impact statement were pretty clear.” The company believed it had picked the best route. “The biggest issue was distance. This was the shortest route through that part of the state, and as a result it had the least amount of land disturbance and affected the fewest land-owners,” he said.
So what changed?
On one level, it looked like another in a long list of Obama White House affronts to Canada. The administration inserted protectionist “Buy American” language in the President’s jobs bill in September, despite Canada’s objections to similar language in his stimulus bill two years ago. The administration also ended an exemption for Canadians from a $5.50 travel fee to help offset the costs of a trade deal with Colombia. As well, talks on a much-hyped Canada-U.S. border accord have been dragging on inconclusively. Meanwhile, the world’s largest trading relationship continues to face a bottleneck at its busiest border crossing because the state of Michigan refuses to approve construction of a new bridge—which Canada calls its No. 1 infrastructure priority.
But in Washington, the pipeline decision looked less like a reflection of the state of what Canadians consider “The Relationship” between the two neighbours and more like another case of foreign collateral damage in an internal American power struggle. In this case, it was a hard-fought battle by environmentalists to put climate change back on the agenda of a President who had promised that his election would be “the moment when the rise of the oceans began to slow and our planet began to heal,” but then failed to deliver climate-change legislation. In short, the project was a casualty of the President’s effort to win back an important part of his political base ahead of the 2012 election.