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Protesters gather on Parliament Hill to demonstrate against the Alberta oil sands ahead of a visit by U.S. House of Representatives Speaker Nancy Pelosi on Sept. 8, 2010. (Adrian Wyld/The Canadian Press)
Protesters gather on Parliament Hill to demonstrate against the Alberta oil sands ahead of a visit by U.S. House of Representatives Speaker Nancy Pelosi on Sept. 8, 2010. (Adrian Wyld/The Canadian Press)

Jobs versus clean air: Oil debate divides Obama's backers Add to ...

Russ Breckenridge is one of the best friends TransCanada Corp. has in the United States as the Calgary-based company looks for Washington's approval to complete its $5.2-billion Keystone XL pipeline to carry crude from the Alberta oil sands to the Gulf of Mexico.

Eager for the thousands of high-paying unionized jobs that would be created, Mr. Breckenridge, the legislative liaison with the United Association of Plumbers and Pipefitters, has enthusiastically endorsed TransCanada's controversial pipeline proposal, which has been delayed by pressure from environmental groups and their allies in Congress and the Obama administration.

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The union's intervention is one example of how partisan interests are blurring in the United States in the aftermath of failed congressional efforts to pass climate legislation, BP PLC's massive oil spill in the Gulf of Mexico, and the high-profile campaign to block expansion of oil sands' imports.

President Barack Obama and the Democratic leadership in Congress have put a new focus on the environmental concerns related to energy production, but heading into November's midterm elections, the Democrats face an angry electorate that appears to be more concerned about a stagnant economy and high unemployment than environmental problems.

Proponents of aggressive development of oil and gas reserves are making common cause with workers to put pressure on Washington to approve controversial drilling in the U.S. and the construction of new pipelines from Canada.

Balancing the conflicting interests is a particular challenge for House of Representatives Speaker Nancy Pelosi, who flew to Ottawa on Wednesday and is meeting provincial premiers and industry executives who favour oil sands expansion, as well as environmental groups and native leaders who oppose development.

Ms. Pelosi has been a leading proponent of climate legislation and green energy initiatives, but she is also viewed as pragmatist whose first priority will be to retain the Democratic majority in the House of Representatives against an expected Republican tide in November - and hence preserve her job as speaker.

Oil and gas producers in the U.S., as well as their allies among Republicans and some congressional Democrats, accuse the Obama administration of ignoring the need for a secure domestic energy supply - and the jobs it would create - in pursuit of environmental goals.

"Oil production is under assault in this country," said Michael Whatley, a Washington-based lobbyist and vice-president of Consumers' Energy Association, which is funded by large energy consumers and producers. "You've got environmental pressure that [is].. now trying to shut off the development of the [Outer Continental Shelf]and shut off imports from Canada - which would drives us to a 90-per-cent import pool. It's crazy."

Mr. Whatley points to the federal moratorium on drilling in the deep waters of the Gulf of Mexico, which the administration imposed after the BP blowout and has refused to lift despite complaints from Gulf state governors about the impact on their local economy. He argues there is also a de facto moratorium on drilling in shallow water as regulators fail to issue any permits for activity.

His group has been lobbying to have Washington approve expanded pipelines from the Alberta oil sands into U.S. markets, and to defeat state efforts to adopt California-style low-carbon fuel standards, which would penalize the use of fuel derived from the oil sands. "It's a real battle … I don't think you can argue that industry, or pro-access advocacy, is winning the day right now," Mr. Whatley said.

While Congress has failed to pass climate legislation or even a bill dealing with oil spills after the BP disaster, the Obama administration is acting through regulation to block or delay new oil development. This summer, the administration's Environmental Protection Agency intervened in the State Department's review of TransCanada's XL project. The agency demanded the department review the climate-change impacts of greater oil sands production that would result, and assess whether there are other means to meet transportation fuel needs - including conservation - that would be less polluting.

Supporters of the pipeline argue that new volumes of Alberta crude would merely replace the heavy oil that would otherwise be imported from Venezuela, Mexico or Nigeria, which is little better in terms of greenhouse gas emissions than oil sands crude.

But Mr. Obama and environmental advocates argue that climate change and more recently, the BP spill, provide compelling reasons to reduce U.S. reliance on oil altogether.

The BP spill and Enbridge Inc.'s pipeline break in Michigan this summer serve as potent reminders of the potential pitfalls of oil dependency, said Liz Barratt-Brown, researcher with the Natural Resources Defense Council in Washington.

"Our problem now is that we're stuck with the fact that 99 per cent of our transportation needs come from one source: oil," Ms. Barratt-Brown said. The construction of new pipeline capacity would merely serve to lock in that overreliance, she said.

Follow on Twitter: @smccarthy55

 

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