Well, it appears that the proposal for the Keystone XL pipeline has finally passed at least one of its biggest hurdles. In its Final Environmental Impact Statement, the U.S. Department of State concluded that completing the pipeline’s northern leg would not have a major impact on global greenhouse gas emissions. Yet, this statement still doesn’t guarantee that the pipeline, facilitating the north-south movement of Canadian heavy crude over 4,000 miles across North America, will receive final approval from Washington. As events have shown, there has been a fundamental confusion in the Obama administration’s policy approach to Keystone from the very beginning. Given environmentalists’ opposition and some emerging legal challenges, President Obama may yet choose to take his merry time to decide on whether to allow the pipeline’s construction.
One thing is for sure, whether the Keystone XL pipeline is built or not, the development of the Alberta “oilsands” will continue. Too much has been invested to date to stop the flow and transport of its so-called dirty heavy crude. Indeed, North American railroads have been taking up a good deal of the slack, much to the dismay of communities located along their tracks and a real fear of future derailments of oil-hauling trains. The cry of “remember Lac Megantic” goes up and rightly so.
In addition, the Americans don’t appear to be in any hurry to bless such endeavours given the vast amounts of oil now coming out of American ground. The U.S. has become fairly energy self-sufficient in oil and natural gas supplies due to “fracking” technologies. Indeed, record U.S. oil production, which rose by 992,000 barrels per day in 2013, more than cancels out the amount of oilsands bitumen that the pipeline would transport to Texas Gulf Coast refineries. However, experts estimate that within the next 15 years the U.S. will still have to import about 30% of its daily oil requirements. This compares to only a few years ago when Americans were looking at importing 70% of their needs. Having ready access to Canadian heavy crude oil could provide one distinct advantage with respect to ensuring American national security. If all of that 30% were to come from Canada, future “energy independence” would most likely encompass an entire continent. No more need to rely on Arab oil imports.
However, Prime Minister Stephen Harper and his government have dropped the ball on this file. Refusing to take “no” for an answer, the PM even gave hints of a threat to divert the heavy crude to China via a new pipeline to the Pacific coast. The mighty Chinese already have a very small but important stake in oilsands development. Sorry, but trying to bully the American President into quickly approving such a project is probably not a good strategy! Demonstrating that the Canadian and Albertan governments are really serious about dealing with the problem of carbon pollution may have been more advantageous and useful. Furthermore, TransCanada and the other pipeline companies will have to better demonstrate their capacity to minimize any environmental and economic damage from potential pipeline leaks — and inevitably there will be more such leaks.
In the meantime, numerous American industry associations and environmentalists continue to battle it out to convince the Obama administration and Congress as to the merit of their respective positions. All the Canadian administration can do is sit awkwardly on the sidelines, patiently wait and see what will happen. Who knows, Canada’s pipe dream scenario may yet become its worst nightmare!
FROLITICKS 