Democratic presidential frontrunner Hillary Clinton – who faces a disgruntled liberal wing – said recently that she opposes Keystone XL.Charlie Neibergall/The Associated Press
TransCanada Corp. is keeping alive its faint hope for the Keystone XL pipeline with a long game that could be re-energized if Republicans win the White House next year.
While U.S. President Barack Obama is expected to reject the pipeline over concerns about rising greenhouse gas emissions related to the oil sands, Republicans in Congress remain committed to it. The party's leading candidates for the 2016 presidential nomination are skeptical about climate change and wholly committed to the fossil fuel industries, including the controversial oil-sands pipeline.
Republican hopeful Jeb Bush – an early frontrunner who has faded – released an energy strategy this week that illustrates conservative orthodoxy. It would roll back the ambitious greenhouse gas (GHG) program put forward by Mr. Obama and remove the United States from an international leadership role that environmentalists say is essential if the world is to avoid the most devastating impacts of global warming.
Canadian companies are already facing uncertainty over climate policy as Conservatives, New Democrats and Liberals vie for electoral success on Oct. 19. The polarized debate in the U.S. adds further political risks for North American business leaders who are looking for clear signals on climate strategy and carbon pricing, amid expectations that countries will reach an international deal in Paris to pursue new targets for emission reductions.
Its elements are commonplace among Republican contenders: eliminate federal regulations that would force utilities to move off coal-fired power; remove any barriers to hydraulic fracturing for oil and gas on federal lands; end the 42-year-old ban on crude exports; and approve Keystone XL. None have put forward a coherent climate strategy.
"It seems that climate science denial is a litmus test for national Republican candidates," Daniel Weiss, a senior vice-president at the League of Conservation Voters in Washington, said Wednesday.
"We would expect a Republican president to do everything in his or her power to undue all the progress that President Obama has made on climate change … And any of the Republican candidates would find a way to resurrect Keystone."
TransCanada shifted its strategy this week, ending legal battles in Nebraska over the state's contentious review process and planned expropriation of farmland.
Instead, it will reapply for approval to the state's Public Service Commission, a process that will likely take it into 2017.
Mr. Weiss said TransCanada would have to reapply for a presidential permit if Mr. Obama rejects it, though Republicans could attempt to fast-track an application. Democratic presidential frontrunner Hillary Clinton – who faces a disgruntled liberal wing – said recently that she opposes Keystone XL.
Both Conservative Leader Stephen Harper and the Calgary-based pipeline company have insisted the game is far from over. In a leaders' debate this week, Mr. Harper said approval is "inevitable" because the pipeline makes sense environmentally, economically and as an energy security issue.
TransCanada's Mark Cooper said the company is not counting on any political outcome, but remains committed to the project for the long-term.
"If it's judged on its merits, it will be approved. If it's judged on science over symbolism it will be approved," he said. "We're confident it will eventually be built and we are committed to seeing that happen."
Former State Department energy official David Goldwyn said he would not rule out Keystone XL approval by Ms. Clinton if she became president.
"If there were serious and enforceable Canadian commitments to adhere to its climate targets, then I wouldn't rule it out from a Democratic administration," he said. "But that depends on the business case still being there."
Mr. Goldwyn added it is hard to predict, based on campaign rhetoric, how a Republican would govern on climate change. He said the U.S. courts have ruled the federal government must regulate GHGs, and it will be difficult to roll back Mr. Obama's plan to reduce coal-fired power, given that it will have been in place for nearly two years and many U.S. states are moving in a similar direction.