Derek H. Burney was Canada’s ambassador to the U.S. from 1989-1993 and was directly involved in negotiating the free-trade Agreement with the U.S. He is a director of TransCanada Pipelines Ltd. but his comments are his personally. Fen Osler Hampson is Chancellor’s Professor at Carleton University. They are the authors of Brave New Canada: Meeting the Challenge of a Changing World.
The outgoing Congress’s efforts to send a bill to the White House approving the permit for the construction of Keystone fell short by one vote in the Senate of the 60-vote majority needed for smooth passage. The bill had earlier passed the House by a wide margin, including support from 14 Democrats. The latest attempt was intended primarily as theatrics to salvage Democratic Senator Mary Landrieu’s Louisiana seat in a runoff election next month.
Nonetheless, Republicans have already said that they will take up Keystone again when the new Congress begins in January. At that point, the question will be whether the new Senate in which Republicans have the majority will be able to muster 67 votes needed to override a presidential veto.
There is little doubt that President Barack Obama wants either to veto Keystone or to stall long enough to allow the project to die on its own. On his way to the APEC Summit last week, Mr. Obama was quoted by the Washington Post to say that he had “to constantly push back against this idea that somehow the Keystone pipeline is either this massive jobs bill for the United States or is somehow lowering gas prices.” The President also said that Keystone would simply allow Canada to ship its oil through the United States to be sold elsewhere, noting that Keystone “doesn’t have an impact on U.S. gas prices.”
The President could use a lesson in economics and the laws of supply and demand. He could also study some basic facts. Canadian oil sold in the U.S or international markets will help lower prices if it increases global production. One also has to wonder where the President is getting his job figures from. The State Department, in its own careful review of Keystone, estimated that the project would create more than 40,000 jobs and also put more tax money in the coffers of those counties through which the pipeline is supposed to run.
The President also ignores the plain fact that Keystone XL will carry U.S. oil from the Bakken fields via Montana as well as Canadian oil. Nothing could be further from the truth than his statement, echoed by fellow Democrat naysayers in the Senate, that the oil is intended strictly for export from the United States. Valero, the largest refiner in the U.S., has stated categorically that it does not plan to export any of the crude oil it receives from the pipeline.
Obama can run from inconvenient facts about Keystone but his room to hide is shrinking. The time for foot-dragging is running out, if not with the lame duck current session of Congress, most certainly with the new Republican controlled Senate and House in January.
The President will likely cite arguments about “due process” as long as he can by arguing that the Nebraska Appeal Court must be allowed to do its job before the State Department recommendation can be sent to the Oval Office. The Court should be the last remaining procedural obstacle and its decision on whether the Nebraska Legislature as opposed to the Public Utilities Commission had the power to rule in favour of the pipeline is due any day now. But, as former U.S. Secretary of State George Shultz once said about Washington, “It’s never over.” Apart from the deleterious impact on bilateral relations, the major consequences of further delays are no jobs and increased rail transport for oil with more intense GHG emissions in America.
A Presidential veto of Keystone would trigger an immediate confrontation with the new Congress, which is already girding its loins for a battle royal over a planned Presidential executive order on immigration. There is, in fact, little to date to suggest that there is much prospect for constructive engagement between the President and Congress on Keystone or anything else. If anything, the President’s inability to find a consensus with Congress simply undermines further his ability to provide leadership in a difficult world. Both fights will have broader repercussions for the final two years of his presidency. A veto could trigger as well a formal challenge by Canada against what would be a breach of the spirit and the letter of NAFTA.
There are continental, geo-political and national interest reasons why the pipeline should be approved.
It is indeed ironic at the very moment Keystone is being sandbagged yet again in Washington that a major new study by the U.S. Council on Foreign Relations, headed by retired U.S. General David Petraeus and the former deputy Secretary of State and head of the World Bank, Robert Zoellick, called for a new vision for North America that included approval of Keystone pipeline along with other continental energy projects and reinforcement of the spirit of NAFTA.
Benign neglect is something Canadians are used to when dealing with America. Malign neglect, on the other hand, is not something to be taken lightly and is definitely unworthy of a neighbour, an ally and a putative world leader.Report Typo/Error
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