XL Pipeline Decision

      Comments Off on XL Pipeline Decision

Excerpted from Saskatoon Star Phoenix editorial November 15 ‘Take new tack on world trade

President Barack Obama’s decision to delay, and potentially kill, the $7 billion TransCanada Keystone XL pipeline may be a watershed moment in Canada’s approach to international trade, as former Canadian diplomat Colin Robertson suggests.

It is safe to say that Mr. Obama’s 11th-hour about face on the massive pipeline project came as a surprise to everyone from Alberta ministers to oil executives to the highest ranks of the Canadian government, including Prime Minister Stephen Harper.

And as Mr. Robertson, who was a key figure in the CanadaU.S. Free Trade deal, noted on the weekend, the Keystone story has Canada’s chief executives sitting up and taking notice. It also had Mr. Harper speculating aloud, just minutes before a tête-à-tête with Mr. Obama, that Canada must spread its wings and seek out other markets for its oil.

If his was a bluff to frighten the Americans back into a continental energy strategy, it was a poor one. No one was more pleased with the prospect of Canada looking to Asian markets than Mr. Obama, who can use Canada’s vast resources as bait in his pursuit of an enhanced Trans-Pacific Partnership deal.

For both the American and Canadian leaders this may be more hyperbole than reality. Canada lacks significant infrastructure needed to get its goods, and especially its oilsands product, to Asia. Historically it also has lacked the will to kill the trade-numbing milk and egg marketing boards, which have precluded trade deals with Europe and Asia.

And before Canada starts to spend the billions it expects to reap from China’s interest in the oilsands, it’s worth remembering that building the pipelines, railroads and highways across northern British Columbia isn’t likely to be any easier than it was convincing the oil-starved Americans to accept Keystone.

However, even though broadening Canada’s global markets will pose a challenge, it will be worth the effort. Saskatchewan, which has become a “have” province largely because it was able to overcome American protectionism and expand its markets in the Middle East and Asia, is an example of what Canada could gain.

Among the top priorities for Canada is strengthening its environmental regulations, monitoring and enforcement. Under the guise of becoming more efficient, Environment Canada has been laying off hundreds of scientists just when it should be bolstering its ranks and increasing investment in research.

It’s worth remembering that it wasn’t for legitimate environmental concerns that Keystone ran aground. America still buys oilsands product from Venezuela and oil from Nigeria – countries with incredibly poor environmental records – and is developing formerly off-limits heavy oil reserves in environmentally sensitive areas of California.

And it’s not for the love of clean water that Keystone was scuttled. The rapid expansion of hydraulic fracking to extract oil and gas in Montana and North Dakota along the headwaters of America’s largest river system is evidence of the sincerity of that concern. Keystone fell because a coalition of anti-government conservatives and anti-intellectual liberals saw the pipeline as easy prey.

If Canada is serious about developing new markets, it needs a new approach to marketing boards and to end shortsighted cuts to essential government services.