National Post (National Edition)
A `DISRESPECTFUL' DECISION
BIDEN'S DECISION TO KILL KEYSTONE WAS DEEPLY DISRESPECTFUL, IF NOT INSULTING, TO CANADA
The torturous Keystone XL saga took another negative turn when U.S. President Joe Biden chose to rescind Donald Trump's 2017 decision to grant a permit for the pipeline to cross the Canada-U. S. border. Biden's decision was arbitrary, discriminatory and hypocritical, just as Barack Obama's similar decision was in 2015. The Obama administration approved more than 30,000 kilometres of pipeline; the only one it blocked was the one from Canada.
The reasoning behind Obama's decision was flimsy. Five separate State Department studies concluded that the pipeline would have no material impact on greenhouse gas emissions, which is presumably why then-secretary of state John Kerry admitted in 2015 that he could not deny the permit “based on the numbers.”
The State Department's reasoning for declaring that the pipeline was in the national interest during Trump's term in office were solid. That, together with significant changes in the project and in the global energy market since 2015, would provide impressive elements for any legal challenge.
Following Biden's order, Prime Minister Justin Trudeau expressed “disappointment” — the lowest decibel of diplomatic complaint. He issued a subsequent statement emphasizing areas on which the two governments share common ground.
A readout from the Friday phone call between the two men followed the same pattern. The prime minister expressed “concern,” but the president was unmoved. Both agreed on a list of non-controversial topics where they find common ground. It sounds as if the prime minister wants to turn the page, or at least turn the other cheek, and move on.
The reality is that Biden's decision was deeply disrespectful, if not insulting, to Canada. It was purely political, a symbolic sacrifice of a climate straw dog.
The fact that the pipeline would be emission free, that it would rely heavily on renewables to meet that goal and that carbon emissions from Canada's “dirty oil” are already 31 per cent lower than they were in 2000 (and falling), did not even register. Nor did it matter that Canada's climate change program, including a prospective $170 per tonne carbon tax, is far more onerous than anything contemplated in the United States. Also ignored was the fact that Indigenous people in Canada have become a $785-million partner in the project.
When Biden indicated that he had rejected the permit just as Obama had done, he tacitly acknowledged that none of these changes had any bearing on his verdict.
Despite all the bonhomie and civility between Biden and Trudeau, the abrupt decision on Biden's first day in office underscores just how irrelevant Canada and its prime minister are to the Biden administration.
Keystone XL would have generated as many as 60,000 direct and indirect jobs in Canada and the U.S., the majority of them in America. If completed, the 1,897-kilometre pipeline would carry 830,000 barrels of crude per day from the oilsands to Nebraska. It would then connect with the original Keystone pipeline that runs to Gulf Coast refineries.
Without Keystone XL, those refineries will have to look to shipments by rail — which is more costly and produces more emissions — or turn to other, less savoury suppliers, like Russia and Saudi Arabia, or perhaps even Venezuela and Iran. These are the consequences of a decision that puts politics before reason.
A Wall Street Journal editorial stated that, “This is a slap at Canada, and it sends a message to investors that playing by U.S. rules provides no immunity from arbitrary political action.” The editorial added that killing Keystone “will merely strand billions of dollars of Canadian investment and kill thousands of U.S. jobs while enriching adversaries and alienating an ally.”
Alberta Premier Jason Kenney has a very different view from the prime minister. He regards Biden's decision as a “gut punch” to Alberta's economy and demands both legal challenges and retaliatory trade action. Several premiers have endorsed his demand.
Keystone XL has long suffered as the whipping boy for Hollywood celebrities and wealthy environmental zealots who were major financial contributors to Obama and Biden's campaigns — more so, in fact, than the unions whose jobs Biden promised to protect. They see pipelines and the oilsands as easy targets.
It is now payback time and Joe Biden delivered. Due process for Canada and any notion of the need for balance between energy development and climate change commitments was never part of his equation. As always in American politics, money talks.
Senate Minority Leader Mitch McConnell pushed back on the Keystone decision, saying, “The president can and should refocus his administration on creating good-paying American jobs, not sacrificing our people's livelihood to liberal symbolism.”
Biden's decision was telegraphed openly in his campaign platform last May and emphasized repeatedly by members of his campaign team. The only real surprise was that the Canadian government seemingly waited so long to register concern at the political level.
Canada should respond with more than empty rhetoric. Legal challenges in the courts and under the dispute settlement mechanism of the United States-Mexico-Canada Agreement should be considered, even if they offer no guarantees.
Trade actions are also worth considering, as is the prospect for a Canadian exemption from the draconian “buy America” measures planned by the Biden administration.
While there are high degrees of fatigue and frustration over Keystone here in Canada, the government cannot close the books on pipelines. We need an energy strategy that better serves Canadian interests.
Few Canadians realize that Western Canadian crude reaches central and Eastern Canada via Enbridge's Line 5 pipeline, which runs through Michigan, but the governor of that state is threatening to cut Canada off from its own oil. We should counter the threat and take the long way around, building an oil pipeline north of Lake Superior and across the Canadian Shield, while reversing Enbridge's existing Line 9 pipeline, so that Canadian pipelines could deliver more Canadian oil to Canadian refineries and consumers. That would mean that the U.S. will no longer have us over a barrel when it comes to consuming our own oil.
Along with completing the government-owned Trans Mountain pipeline to the West Coast, the federal government should dust off the Energy East file, a project that would be economically and socially beneficial not only to the Maritimes, but also to Quebec. (Ottawa earlier abdicated its exclusive jurisdiction over interprovincial pipelines and granted an explicit veto over the project to Quebec.)
Drastic, punitive action against Alberta and Canada's economic prospects by our erstwhile neighbour and ally should compel us to act forcefully. A government that intends to serve the national interest and preserve national unity has to look beyond the central core of the country and respond to the legitimate aspirations of our Western and Eastern regions, as well.
Most of all, our government needs to get up off its knees and stand up for Canada lest we be consistently abused with impunity and taken for granted about a sector of our economy that is vital to our economic growth prospects.
CANADA SHOULD RESPOND WITH MORE THAN EMPTY RHETORIC.