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Canadian election stalls XL verdict Concern verdict prior to Oct. 19 vote could be seen as interference; XL decision at more than 2,500 days way over 478-day average GARY PARK For Petroleum News
The Canadian federal election campaign is now identified as the latest hitch in the Obama administration’s prolonged consideration of TransCanada’s Keystone XL pipeline.
David Wilkins, a former U.S. ambassador to Canada, said delaying the verdict would give the two countries a chance to reset a relationship that has been stretched to breaking point by the issue.
He said a U.S. decision released during Canada’s 11-week campaign leading to a vote on Oct. 19 could be seen as political interference.
However, Sen. John Hoeven, a North Dakota Republican, said he has heard from “credible” sources that President Barack Obama will reject the pipeline during the current congressional recess.
Erin Flanagan, an analyst with the Pembina Institute, a Calgary-based energy think tank, said XL is “something that all of our political candidates are talking about. It’s something that has really been dramatized for the last number of years and so a decision from the U.S. at a key moment in the election would have very big reverberations.”
Wilkins, a lawyer who has represented the Alberta government and the Canadian Association of Petroleum Producers in the U.S., said XL has become “the big gorilla” in cross-border dealings, especially between Obama and Prime Minister Stephen Harper.
Bloomberg News reported earlier in August that some U.S. government officials agree that Obama’s decision could affect the tone of discussions on various issues, including Canada’s position on a Trans-Pacific Partnership trade deal, Canada’s on-going role in providing plans to attack the Islamic State and its program to train the Ukrainian military to tackle Russian-backed separatists in the eastern Ukraine.
Rejection expected Despite those sensitive matters, industry and congressional sources have increasingly said they expect Obama to reject XL, ending a process that has stretched over almost seven years.
That view has been strengthened by Obama’s recent moves to reduce U.S. reliance on fossil fuels, including a policy to curb carbon emissions from power plants by 32 percent over 15 years.
In addition, he is scheduled to draw greater attention to climate change later in August when he addresses a green energy summit in Las Vegas and then travels to the Alaskan Arctic to underscore the impact climate change is having in that region.
Those are also a prelude to the United Nations climate summit in Paris in December.
Defending the time being taken on XL, Obama has argued he is simply carrying out in an “ordinary way” an executive order issued in 2004 by his predecessor, President George W. Bush, requiring a presidential permit for pipelines entering the U.S.
XL an exception But an Associated Press review of cross-border pipeline applications over the past 11 years shows that XL has become an exception.
Since April 2004, AP said the U.S. government has taken an average 478 days to approve or reject other applications, while XL has been waiting for a decision for almost 2,500 days.
The prolonged deliberations have forced TransCanada to, by some estimates, invest US$2.4 billion in the US$8 billion project, based on its assumption and those of producers in the Alberta oil sands and North Dakota Bakken that the U.S. would sooner rely on North American oil supplies than those from Venezuela, Nigeria, North Africa and the Middle East.
Obama started unveiling his personal leanings on XL at Georgetown University two years ago when he said that “allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest. And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution.”
He declared earlier in August that climate change is “one of the key challenges of our lifetimes” and is on that “no single country” can resolve.
However, the U.S. State Department, which provides Obama with a recommendation on which he can decide whether to issue a Presidential Permit, said in an environmental report last year that XL would be unlikely to contribute to greenhouse gas emissions in part because the oil sands would be developed regardless and the oil would be transported to markets even without XL.
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