Pipeline’s future linked to emissions
Obama touts climate plan
U.S. President Barack Obama clearly tied the fate of the proposed Keystone XL pipeline to its impact on greenhouse gas emissions in a major speech Tuesday laying out a plan for his country to fight climate change.
Obama’s new national climate change strategy could have wide-ranging implications for Alberta and Canada’s own efforts to reduce greenhouse gases. But the focus for the province Tuesday was on its implications for TransCanada’s $5.3 billion pipeline proposal, expanding capacity for Alberta bitumen to reach the U.S. Gulf Coast for refining.
Keystone has become a flashpoint for environmental groups wanting to slow the pace of oilsands expansion to fight greenhouse gas emissions and protect against spills. In the face of that opposition, Canadian leaders, including Premier Alison Redford, have devoted much effort to selling the project and the province’s environmental credentials.
Obama singled out the pipeline project about halfway through his speech, saying a U.S. energy strategy must be about more than just producing oil. “It’s certainly going to be about more than just building one pipeline,” he said to the audience listening in the hot sun at Georgetown University in Washington, D.C.
“I know there’s been, for example, a lot of controversy surrounding the proposal to build the Keystone pipeline, that would carry oil from Canadian tar sands down to refineries in the Gulf,” he said.
Keystone will only get a green light if the U.S. State Department thinks the project serves the nation’s interests, he said to applause, which means it must not significantly “exacerbate the problem of carbon pollution.
“The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward. It’s relevant,” he said.
Like almost every other discussion related to Keystone, reaction to Obama’s comments was sharply divided. Energy industry representatives, including TransCanada, said they believe the pipeline will meet Obama’s criteria. But environmental groups said they believe it will fail.
Alberta officials have worked hard in recent years to sell U.S. decision-makers on the pipeline, which is viewed as a critical piece of infrastructure with a capacity of 830,000 barrels a day that would help reduce the oil glut and potentially increase the price Alberta gets for its oil relative to the North American benchmark.
Redford and Alberta’s Energy Minister Ken Hughes were unavailable to comment Tuesday as they focused on southern Alberta’s flooding. International and Intergovernmental Relations Minister Cal Dallas said in a written statement the province welcomed Obama’s new climate-change policy.
Dallas and federal Natural Resources Minister Joe Oliver pointed to the U.S. State Department’s draft environmental impact assessment, released in March, which said the pipeline expansion would have little impact on the growth of Alberta’s oilsands and related greenhouse gas emissions.
TransCanada, the company at the centre of the debate, said in a statement it believes the pipeline complies with Obama’s criteria. But environmental groups such as Greenpeace Canada and the Sierra Club said Obama’s decision to make greenhouse gas the litmus test for Keystone should make it easy for him to reject it.
“If President Obama is going to be following the signals that he gave today, denying Keystone XL would be a very measured and cautious approach to addressing climate impacts,” said Nathan Lemphers, a senior policy analyst with the Pembina Institute.
Based on his analysis of the climate impacts of Keystone, presented on behalf of the environmental think-tank in Washington earlier this year, Lemphers estimated that filling the Keystone pipeline with oilsands bitumen will require a 36-per-cent increase in production from today’s levels.
“That’s the equivalent of putting over four million cars on the road,” he said. “That’s not inconsequential.”
Obama is expected to make a final decision on Keystone by the end of the year.