Keystone XL’s demise a grassroots triumph
In his announcement Friday that he will not approve the proposed Keystone XL pipeline, U.S. President Barack Obama is signalling to world leaders his determination that more ambitious goals be set for confronting global warming at the upcoming climate-change summit in Paris next month.
In that cause, Obama has a kindred spirit in Justin Trudeau.
The new PM’s support for the megaproject has been tepid at most. And Trudeau’s own plans for the Paris summit are unprecedented: He has recruited all 13 premiers to join him, enlisting them as partners in achieving goals that must be met at both regional and national levels.
In effectively killing Keystone XL, Obama euthanized a venture that would have been 14 years in the planning and building before finally going online in 2022.
The Canadian Pacific Railway, by contrast, took five years to complete, and that was more than a century ago.
TransCanada is one of the biggest pipeline operators in the world. It is a behemoth with $8.7 billion in 2014 revenues and profits last year of $1.8 billion. And it just got blown off — again — by the U.S. government. In February, Obama vetoed a bill passed by Congress that would have authorized the Keystone XL.
It seems that a new narrative is beginning to play out across the continent, in which the powers that be are no longer always hostage to Big Money, but are also influenced by populist sentiment.
This week, generations of white male orthodoxy gave way to a new Canadian federal cabinet that, for the first time in history, looks like Canada, gender equality included.
Grassroots opponents of jets at Billy Bishop airport got their wish this week when the Grits recommitted to keeping the downtown Toronto airport jet free. Among those stiffed by that decision: Porter Airlines; jet maker Bombardier Inc., a self-styled industrial champion accustomed to deference; and the unaccountable Ports Toronto (formerly the Toronto Port Authority).
The long-form census, a bane to paranoid libertarians, was restored this week. That will give StatsCan a chance to reclaim its pre-Stephen Harper status as one of the world’s best data-gathering agencies. And, by popular demand, Canada Post Corp. has suspended its widely loathed community mailbox program, just 10 months after its inception.
Keystone XL’s demise is also a grassroots triumph.
Republicans in thrall to Big Oil promoted it as a job creator, infrastructure project and a means to U.S. energy self-sufficiency.
But the U.S. State Department calculated that the proposed Keystone XL pipeline, nearly 1,900 kilometres long, would create exactly 43 permanent jobs. Thanks to aggressive shale-oil development in recent years, the U.S. already is self-sufficient in oil. And a heavy oil pipeline traversing three U.S. states, including the aquifers of the great American breadbasket, wasn’t the most ideal form of infrastructure stimulus.
It’s likely that Obama opposed the Keystone XL since he inherited its 2008 application for U.S. approval. After all, TransCanada’s proposal has languished in his administration for about seven years.
For good measure, Obama’s State Department warned that Keystone XL would be the equivalent of putting an additional 300,000 vehicles on the road, or the CO2 emissions from eight new coal-fired power plants. And the U.S. Environmental Protection Agency (EPA) warned that “widespread development of Canada’s oilsands represents a significant increase in greenhouse gas emissions.”
Obama said the economic benefits of a pipeline would mostly go to Canadians, while all the environmental risks would be borne by Americans. And he openly complained that in his dealings with Harper, the Canadian PM had a single-minded obsession with getting approval for the Keystone XL pipeline. It’s been said that Keystone XL lost a cheerleader in Harper’s electoral defeat. But Harper was more hindrance than help, with his presumption of what U.S. elected officials should do. It’s “a complete no-brainer” for the U.S. to approve Keystone XL, Harper said at a 2013 event in New York. And Canada would not “take no for an answer” if the U.S. dared nix his pet project.
Fact is, if the Keystone XL had been approved, it’s hardly a sure thing it would have recovered its costs. It would have gone online at the tail end of the Oil Age, at a cost of $13.2 billion. That’s more than double the original estimate. Keystone XL probably wouldn’t have had time to pay for itself before alternate energy sources were in widespread use.
Many political scientists are convinced that populism was the determining factor in Obama’s decision, given that some U.S. regulators anticipated only slight environmental impact from the Keystone XL. (None saw U.S. benefits from it.)
“Once the grassroots movement on the Keystone pipeline mobilized, it changed what it meant to the president,” Douglas G. Brinkley, a historian at Rice University who studies U.S. presidential policies on the environment, told the New York Times on Nov. 6.
“It went from a routine infrastructure project to the symbol of an era.”
Keystone XL will be remembered in B-schools as a model of how not to sell a megaproject. It was shot through with arrogance, ignorance of both populist and political sentiment, and dubious economics.
Even at this late hour, TransCanada continues to run advocacy ads for Keystone XL. That effort will likely be ramped up once Obama leaves office.
But while the 15 candidates seeking the G.O.P. presidential nomination say they favour Keystone XL, none is likely to become U.S. president. Hillary Clinton, meanwhile, came out against the Keystone XL project Sept. 22.
“We’ve tried to stay out of the politics of this situation,” Russ Girling, CEO of TransCanada, told analysts this week, “and focus on the things that we’re capable of doing and can control and that’s the regulatory process.”
Putting aside the $3.6 million (U.S.) that TransCanada spent on trying to buy political influence in the U.S. last year alone, Girling needs a tutorial on what it means to “stay out of politics.” Girling has only been able to control the regulatory process in Stephen Harper’s Ottawa.
Otherwise, TransCanada has failed to understand, much less control, the regulatory process at the EPA, the U.S. State Department, the three U.S. states the Keystone XL was to cross, and as we saw Friday, the environmental brain trust at the White House.
Where TransCanada inadvertently succeeded was in galvanizing environmentalists, farmland owners and alternative-energy advocates around the cause of killing a project that had managed to become as totemic as Love Canal.
An era when small groups — a tyranny of the minority — have an inordinate say in how life unfolds isn’t over. But we do seem to be turning a corner on that.