If the Republicans win the next presidential election, the Keystone XL pipeline might yet be built. But if Hillary Clinton, the almost-certain Democratic nominee, becomes president, then Keystone will get its last rites, given that she recently opposed the project.
What lessons can we learn from President Barack Obama's rejection of Keystone XL last week? Here are a few, but by no means all.
U.S. politics will trump Canada-U.S. relations every time. The idea that somehow Canada's historical relations and friendship with the United States will induce a president to give priority to relations with Canada when domestic U.S. politics are at play fundamentally misunderstands Washington and how little Canada counts there. The Obama administration strung Canada along for five years over Keystone, hardly the way to treat a "friend."
Mr. Obama lacks any interest in or concern for Canada, having visited here only once early in his presidency. He had very distant relations with former prime minister Stephen Harper who, in turn, did nothing to cultivate personal relations with U.S. political figures.
That Justin Trudeau, the new Prime Minister, should expend much effort on cultivating Mr. Obama would be a pro-forma exercise. Mr. Obama is approaching lame-duck status as President.
We saw U.S. attitudes recently with the Trans-Pacific Partnership, when Washington negotiated a side deal with Japan for automobile parts, behind the backs of Canada and Mexico. The auto supply industry is crucially important to Ontario given the integrated nature of the industry. The Americans didn't even think of that when it cut the deal with Japan. Canada and Mexico were furious when they learned of the deal and demanded further talks, but still got shafted.
Hypocrisy is never far from politics, as in the Keystone decision. While decrying the burning of "dirty" bitumen oil, note that the United States' own oil production has soared, courtesy of shale oil. Depending on the month used for comparison in 2014 and 2015, U.S. oil production ranged from 8.8 million barrels to 9.6 million barrels a day – up from 4.5 million in 2006.
In September, 2015, according to the American Petroleum Institute, crude oil production grew at the fastest pace for any September in 43 years – 9.12 million barrels a day. In other words, if the rejection of Keystone is part of Mr. Obama's "war on oil" to protect the climate, his country is losing. At least on the production side.
Fuel consumption for vehicles is indeed down, being lower in 2014 than in 2003. It rose again in both 2013 and 2014, in part because booming U.S. oil production drove down pump prices, thereby encouraging people to drive more and buy larger cars.
One reason for the decline from 2003 to 2014 was the expansion of ethanol production, which is one of the least effective methods of reducing greenhouse gas emissions, because the growing of corn and the manufacture of ethanol produces so many GHGs.
Who knows if Alberta could have given itself a better reputation in Washington and elsewhere if the provincial government, the Harper government and the oil industry had not drunk their own Kool-Aid about how much they were doing on the environmental front.
The facts were clear: Intensity of GHGs per barrel was rising less rapidly than before, but if considerably more barrels were produced, then total GHGs would increase. Indeed, the anticipated rise in GHGs from bitumen would have wiped out all the reductions made in other parts of Canada.
The Canadian reaction was salesmanship – advertising, trips to Washington by political leaders, lobbying – repeatedly telling people why they should do what was wanted, instead of statesmanship, listening to what critics were saying and trying to accommodate them.
Bitumen is landlocked. That simple fact ought to have driven every Alberta, federal and industry strategy. Geography ought to have required all the players to ask themselves: What do we need to do to get the answer we need?
The demise of Keystone means more oil will move by rail – a very bad outcome compared with moving it by pipeline. And all three major new pipelines in Canada to move bitumen are in serious trouble. A new government in Ottawa is staffing up with strong environmentalists opposed to fossil fuels, non-governmental organizations are lining up in opposition, aboriginal groups are mobilized to oppose, and the Quebec and Ontario governments are hostile to a pipeline to the Atlantic, while the B.C. government is nervous about local opposition to moving any oil.