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john ibbitson

If the Obama administration blocks the construction of the Keystone XL pipeline, relations between Canada and the United States will enter a deep freeze the likes of which have never been seen.

Highly placed government sources, speaking in confidence, stressed repeatedly in several conversations that Ottawa considers approval of the pipeline, which would ship bitumen from the Alberta oil sands to American refineries, vital to Canada's economic future.

Denying that approval would not be considered a snub; it would be considered a betrayal.

There is serious tension in Ottawa on this file. Of several people interviewed, none was confident of a yes from the Obama administration. While no one is predicting a no, officials are deeply worried.

Vetoing Keystone would transcend the chagrin of the Bush administration over the Chrétien government's refusal to support the American invasion of Iraq. It would dwarf the softwood lumber dispute.

Border co-operation initiatives could be put on hold. Canada could flatly reject American proposals to reduce agricultural and intellectual property protections at the Trans Pacific Partnership talks.

Most important, the thousand different ways in which Canadian and American officials work closely and co-operatively together daily would be replaced by a Canadian cold shoulder. A relationship once considered warm would struggle to remain even formally correct.

"It will be a huge boulder on the road of the bilateral relationship," warns Derek Burney, former Canadian ambassador the United States. (Mr. Burney is on the board of TransCanada Corp., which is behind the Keystone proposal.)

Keystone's proponents argue that the proposed pipeline has already been rerouted to assuage American concerns over potential contamination of an aquifer.

When American ambassador David Jacobson urged the Harper government to do more to show its commitment to fighting climate change, Ottawa responded with Monday's announcement harmonizing heavy truck fuel emission requirements with American standards.

The Harper government has made it clear it is willing to work closely with Washington on any continental plan to combat global warming that Congress approves.

But Prime Minister Stephen Harper is very aware that President Barack Obama cannot afford to alienate the liberal base of his party, many of whom see the oil sands as a cause of global warming and the pipeline a risk to the land and water beneath it.

Not just environmental activists are opposed: there is skepticism about shipping oil sands product across the United States by pipeline within the administration itself.

Conversations between American and Canadian officials have sometimes been tense, leaving the Canadians uncertain about the outcome.

If Mr. Obama ultimately chooses to veto Keystone when he announces his decision this spring, the anger of the Canadian government will be deep and long-lasting, officials predicted.

That anger is likely to be mirrored among large swathes of the Canadian population. Mr. Obama is enormously popular in Canada. Polls showed a great majority of Canadians supported him in both the 2008 and 2012 election.

But among Conservative supporters, especially, a no on Keystone would be seen as a slap in the face, setting back oil sands production, costing thousands of jobs, costing the Alberta government billions in lost or lowered revenues and acting as a drag on future economic growth nationally.

Mr. Burney said the only silver lining of a Keystone rejection might be to accelerate pipeline construction east and west, to tap into overseas markets.

But however that might diversify Canadian exports, a friendship between two countries based on shared economic, security and cultural interests would be strained to the breaking point.

Of course none of this would happen, if Mr. Obama simply said yes.