U. S. SPURNS KEYSTONE
Refusal puts spotlight on Northern Gateway project.
OTTAWA — The U. S. administration has refused to give a presidential permit to construct the $ 7- billion Keystone XL pipeline from Alberta to the U. S. Gulf Coast, triggering new assertions the Northern Gateway pipeline from Alberta to the B. C. north coast must become a national Canadian priority.
The Harper government and U. S. congressmen both said Wednesday’s move increases the likelihood that China will become a major new buyer of Alberta bitumen.
“Obviously this whole episode underlines the importance of diversifying our market. We can’t have only one customer,” Foreign Affairs Minister John Baird said in Toronto.
Canada is a major world exporter of oil and almost all of it goes to the U. S.
Natural Resources Minister Joe Oliver said the American decision “underlines the importance of diversifying and expanding our markets, including the growing Asian market to help ensure the financial security of Canadians.”
Prime Minister Stephen Harper expressed his “profound disappointment” of the decision in a phone call to U. S. President Barack Obama, his office said. Harper told Obama that “Canada will continue to work to diversify energy exports,” including to China.
The Obama administration said a proper environmental review could not be conducted before a Feb. 21 deadline set by the U. S. Congress to rule on the politically charged Keystone project, which is bitterly opposed by environmentalists and endorsed by Republicans, who say it will create needed jobs in the U. S.
“The rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment,” Obama said in a statement.
“This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department
[ The American decision] underlines the importance of diversifying our markets. NATURAL RESOURCES MINISTER JOE OLIVER AFTER THE U. S. REFUSED PERMISSION FOR THE KEYSTONE XL PIPELINE
from gathering the information necessary to approve the project and protect the American people.”
But the U. S. administration suggested Keystone’s owner, Transcanada Pipelines, reapply with routing changes to avoid environmentally sensitive areas, particularly in part of Nebraska.
Transcanada chief executive Russ Girling said the company will reapply. “Denial of the permit application does not preclude any subsequent permit application or applications for similar projects,” said a statement from the U. S. State Department.
“This outcome is one of the scenarios we anticipated. While we are disappointed, Transcanada remains fully committed to the construction of Keystone XL,” he said. “This project is too important to the U. S. economy, the Canadian economy and the national interest of the United States for it not to proceed,” he said.
“We will reapply for a presidential permit and expect a new application would be processed in an expedited manner to allow for an in- service date of late 2014.”
House Speaker John Boehner, a Republican, said he’s worried by Harper’s threats to sell oil to China if the United States does not approve Keystone, which is designed to move 830,000 barrels of oil a day.
“If we don’t build this pipeline to bring that Canadian oil, and take out the North Dakota oil and deliver it to our refineries in the Gulf Coast, that oil is going to be shipped out to the Pacific Ocean and be sold to the Chinese,” Boehner told reporters. “This is not good for our country.”
Oliver said Ottawa would also continue to work with the United States to “further strengthen energy security for both our countries.”
“We still hope that the [ Keystone] project will be approved in the future [ based] on its merits,” he said.
Harper has consistently argued that Enbridge Inc.’ s $ 5.5- billion Northern Gateway pipeline to B. C. is a key strategic initiative for Canada in light of the political problems faced by Keystone.
But critics and analysts said another setback for the Canadian oilpatch — the collapse of Enbridge’s Northern Gateway agreement with the Gitxsan First Nation — raises questions about the inevitability of the Alberta- B. C. megaproject.
Enbridge, which said last month the Gitxsan deal was a signal to Canadians of aboriginal support for the project, confirmed hereditary chiefs had voted against the agreement.
One B. C. aboriginal leader said the Harper response to the Keystone decision is simply rhetoric that ignores the constitutional rights of first nations.
“You play hockey? You know all the mouthin’ off that happens? That’s what’s happening right now,” said David Luggi, chief of the Carrier Sekani Tribal Council in Prince George. “It’s just chirpin’ by Prime Minister Harper. We have our game faces on and we’re ready.”
A senior policy analyst with the Pembina Institute, a Calgarybased environmental organization, said the Obama government’s decision should send a signal to Harper that neither Keystone nor Northern Gateway are “no- brainers.”
Pembina’s Nathan Lemphers said the problems faced by Trans Canada in the U. S. should be a lesson for Northern Gateway’s proponents to be openminded about issues such as the proper routing of major pipelines.
Anti- Keystone protest leader Bill Mckibben, founder of the activist group 350. org, hailed Obama for standing up to the “fossil fuel lobby” which he said was in control of Congress.
“Assuming that what we’re hearing is true, this isn’t just the right call, it’s the brave call,” he said in a statement.
“The knock on Barack Obama from many quarters has been that he’s too conciliatory. But here, in the face of a naked political threat from Big Oil to exact ‘ huge political consequences,’ he’s stood up strong,” Mckibben said.
But a U. S. policy analyst said the Harper government’s focus on selling bitumen to China won’t have a huge influence on U. S. policy- makers despite the rhetoric Wednesday by U. S. congressmen.
Chris Sands of the Washingtonbased Hudson Institute said American decision- makers know Northern Gateway is far from imminent. The project just went before a National Energy Board panel for hearings this month, and the project isn’t set to be completed until late 2017.
“If Nebraska politics and American politics are tough, politics in B. C. are going to be tougher with the natives and so on,” Sands said. “Nobody believes Harper can deliver on the threat, except in the longer term. So they say, ‘ Okay, we’ll delay your [ Keystone] pipeline for another year. Get over it.’”
He said Harper’s message is almost certainly aimed at Canadian rather than American ears. “It’s about standing up, it’s about national pride. It’s at a time when Canada quite rightly feels like you’re a political football, you are being pinged around as if what you think doesn’t matter at all, which is kind of true.”
Threatening to sell bitumen to China is the only “self- respecting position the government can take,” Sands said.