On Keystone XL environmental permit

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Keystone decision feels like Alice in Wonderland experience

The Globe and Mail Monday, Feb. 03 2014 Colin Robertson

For Canada, the Keystone XL presidential permit application process continues to be an Alice in Wonderland experience. The six-year odyssey gets “curious and curiouser.”

Much anticipated, long delayed, the State Department report contained no real surprises. Its most important conclusion is its assessment that whether or not the pipeline is built it is “unlikely to significantly affect the rate of extraction in oil sands.”

Rail transport in the U.S. is predicted to grow from nearly nothing a decade ago to 1.1 million barrels per day by the end of 2014 (the increase in Canada is similar). In the absence of the pipeline, alternative modes of transportation, notably rail, would result in 28 to 42 per cent more GHG emissions. Accidents on both sides of the border have surged as the oil industry takes the train.

So can we anticipate a decision in the coming months? Maybe. But maybe not, given U.S. politics in an election year.

For environmentalists, the pipeline is their litmus test of the Obama Administration’s commitment to containing climate change. This is where politics will play into calculations about the timing of the Administration’s final policy determination.

Environmentalists are a key component of the Democratic coalition bringing money, passion and campaign skill. While the odds are long, Mr. Obama’s last hope for a legislative legacy is to win back the House of Representatives in November. To win he needs environmentalists.

Three other perceptions will factor into White House thinking:

· Sense of U.S. energy independence created by the shale revolution. The United States is projected to become a net exporter of natural gas by 2018.

· Acknowledgement (sort of) in the report that there aren’t that many jobs at stake. The report says pipeline construction will generate 3,900 direct jobs (for a total of 42,100 in indirect and induced) and then 50 jobs for its post-construction operation.

· Influence and ‘gut’ feeling of those in cabinet and the senior policy staff who have embraced climate change as religion. For them it is about the world they leave to their children and grandchildren.

Originally a Canada-U.S. dispute, the XL permit has long since morphed into a U.S. domestic issue. It featured in the 2012 presidential race and it continues to pit Democrats against Republicans in congressional politics.

For Canada, this is both a huge complication and a considerable handicap to finding a diplomatic compromise. After some initial missteps – using foreign steel annoyed the unions (rectified they came onside); inexplicable obduracy over changing the Nebraska route (since rectified) – we have waged a reasonable campaign in the U.S.

Ambassador Gary Doer has been an effective and articulate advocate. Go With Canada is based on security of supply, jobs, environmental due diligence and good neighbourliness. We moved in tandem with the U.S. on emissions policy. We haven’t delivered on our promised oil and gas regulations but then both national governments suffer from dysfunctional national energy strategies.

In a rational world we would anticipate a permit decision by summer. But in the world of Washington politics, like that of Alice’s Wonderland, there is no predictability and very few certainties. Like Alice, we should eventually get there, as long as we are sure we know where we want to go.

A former diplomat, Colin Robertson is vice-president of the Canadian Defence and Foreign Affairs Institute and a senior advisor to McKenna, Long and Aldridge LLP.