Any thoughts Canadian Prime Minister Stephen Harper held that he could sit back while President Barack Obama fielded the slings and arrows of anger over Keystone XL are being dashed.
Suddenly, Harper finds himself under siege from a former prime minister, a former federal cabinet minister and a current Alberta cabinet minister — all of them members of governing federal or provincial Conservative party governments.
Feeling the heat from his own party faithful must come as jolt to a man who, during his eight years in office, has been rated as the petroleum industry’s best friend in recent memory.
Not only that, but the newly installed U.S. ambassador to Canada, while eager to play a role as deal broker to facilitate cross-border trade, suggested Canadians should avoid making too much of a fuss over the fate of XL.
Ambassador Bruce Heyman, a Chicago investment banker, was unable to give any updated forecasts on when Obama will cast the final vote on the pipeline, noting only that the review process is continuing.
But he did argue that XL should not dominate Canada-U.S. relations, making his case that North American energy issues are being distorted by those who say the two governments must make a hard choice between tackling climate change and expanding energy development.
Instead of being an either or debate, the focus should be on energy and the environment, he said.
Heyman said there is no linkage between efforts to reduce greenhouse gas emissions and Obama’s pivotal decision, after more than five years of waiting, on XL.
However, he did not rule out the prospect of environmental conditions becoming part of Obama’s pipeline verdict. “Global warming is real and we all have to be cognizant that it is real and we’re all affected by it,” he said.
Heyman suggested he could play a useful role in matters of foreign investment and trade opportunities and “be an advocate for outcomes.”
He described himself as agnostic over what direction trade is flowing, preferring to concentrate instead on simply increasing the volumes.
Mulroney calls for moving resources
At the same time Heyman was occupying an office that has been vacant for nine months — itself a source of irritation within the Canadian government — former Canadian Prime Minister Brian Mulroney prodded Harper to show greater leadership in moving Canada’s natural resources to global markets, with XL being just part of that push.
Without criticizing Harper directly, he called for a “vigorous national commitment” to develop petroleum and mineral resources and sell them outside North America, calling for the creation of a resource development office.
Mulroney, who was prime minister for nine years from 1984, said energy development should be a national priority from their extraction to building transportation systems, guarding the environment and working with the U.S. on energy and carbon reductions.
He said that requires a different approach to selling Canadians on the importance of pipeline projects such as XL and Enbridge’s Northern Gateway system, but he also delivered a message to Heyman, by declaring that Canada fully expects the XL pipeline “to be approved.”
“Leadership does not consist of imposing unpopular ideas on the public, but of making unpopular ideas acceptable to the nation,” he said. “This requires a very solid argument for change and a very strong ability to make that argument over and over again.”
If Canada hopes to achieve a “powerful explosion of development in our energy sector” it must win over aboriginal Canadians, affected provinces and environmental advocates, Mulroney said, echoing the recent comments of Jim Prentice, a former cabinet minister under Harper and one of those identified by Mulroney as a candidate to head his proposed resource development office.
Otherwise Canada’s natural resources “will remain in the ground, dead as a doornail,” he told an audience of 400 business and political leaders.
Upbeat mood
But there are feelings in some quarters that if XL obtains a Presidential Permit it could see the environmental opposition to the oil sands start to evaporate.
Certainly the upbeat mood in the Canadian petroleum industry received a lift at the benchmark investment conference earlier in April organized by the Canadian Association of Petroleum Producers and Scotiabank that attracted double the attendance of the previous gathering in December 2012.
The rebuilding confidence was attributed to the growing role of rail in moving crude, along with surging oil and natural gas resource development, a firming of gas prices and moves to address environmental concerns.
If XL does obtain a Presidential Permit this year it could see environmental opposition start to crumble said Cindy Schild, senior manager, refining and oil sands programs, with the American Petroleum Institute.
She said a victory for XL could see environmental organizations shift their attention to coal or LNG from pipelines.
“If you lose a significant (pipeline) case ... do you move to the next one, or are you going to try a different approach?” Schild argued.
Whatever slight hope her comments might contain, Harper is experiencing a sudden turning of the tables in the XL debate, with Mulroney, Prentice and current Alberta Finance Minister Doug Horner suggesting that he has fallen short of matching his dream of turning Canada into an energy superpower with actions to promote and defend the petroleum industry.
Horner told Bloomberg in New York earlier in April that the Harper government “needs to step up a little bit” to advance various pipeline projects targeting Asian and U.S. markets.
