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More questions than answers from Obama on Keystone pipeline

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Muddying the debate
President Barack Obama was fiery and forceful this week as he signalled what it will take to approve the controversial Keystone XL pipeline.

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But when the dust settled, little appeared to have changed. Indeed, some observers believe he left more questions than answers after his speech on climate change.

All sides in the debate –they include those opposed, those in favour, and TransCanada Corp., the company behind the project - claimed something akin to victory.

"He clarified that the net effects of the pipeline's impact on our climate will be critical to determining whether this project is allowed to go forward," TransCanada said, adding it was "pleased with the president's guidance to the State Department, as the almost five-year review of the project has already repeatedly found that these criteria are satisfied."

The bottom line, according to the President, is that the pipeline, which would carry one million barrels a day of Alberta crude to the Gulf coast, will be approved as long as it "does not significantly exacerbate the problem of carbon pollution."

A decision is expected later this year, the first attempt having been rejected, forcing TransCanada to change the proposed route to skirt an environmentally sensitive area in Nebraska.

"In short, the speech raised more questions than it answered about a piece of infrastructure that is undoubtedly of tremendous importance to the Canadian economy and to ongoing U.S. energy policy - and one whose future is still a matter of public policy debate in the U.S.," said economists Derek Holt and Dov Zigler of Bank of Nova Scotia.

Some analysts believe Keystone still stands a good chance.

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RBC Dominion Securities has a particularly interesting argument, noting that the Draft Supplementary Environmental Impact States has already found that the pipeline's projected greenhouse gas emissions would total 31.9 million tonnes a year, roughly the equivalent of electricity use by 198,000 homes.

"Over all, our initial thought is that there was little said that changes our 75 per cent probability that the Keystone XL project will receive its presidential permit by the end of the year," said RBC analyst Robert Kwan.

"It is our opinion that the electricity consumption of 398,000 households is not an amount of carbon emissions that would 'significantly exacerbate' carbon pollution," he added.

Required reading
Our latest C-Suite survey of business leaders shows that cyber-security is not a serious worry for a majority of those sitting in the nation's corner offices. Richard Blackwell reports.

Two decades on, internal free trade should not be something Canadians fret about, or blockade bridges to get, Barrie McKenna writes.

Canada is getting a new stock exchange, Boyd Erman reports. A group including Royal Bank of Canada and five other large investment firms is launching a competitor to the Toronto Stock Exchange, which handles the most trading in Canada.

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Barrick Gold Corp. plans to overhaul its board of directors in the wake of a backlash from powerful shareholders. Jacquie McNish reports.

The debate over when the Federal Reserve will begin to reduce its hefty stimulus is suddenly murkier after a report showing the U.S. economy emerged from the first quarter much weaker than previously believed. Kevin Carmichael examines the issue.

The bond market rout is sending shock waves through the corporate credit market, but mining companies are taking a particularly hard beating as commodity prices tumble. Tim Kiladze and Jacquie McNish report.

Anticipation of Mark Carney's arrival at the Bank of England Monday is so high that one British newspaper ran a three-part series on him this week and the BBC plans a live broadcast outside the bank's head office in central London just to get a shot of him walking into work, Paul Waldie writes.

Toronto-Dominion Bank launched an aggressive bid to lure the Aeroplan business away from Canadian Imperial Bank of Commerce, as TD looks to take a bigger share of the lucrative credit card market. Tim Kiladze reports.

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About the Author
Report on Business News Editor

Michael Babad is a Report on Business editor and co-author of three business books. He has been with Report on Business for several years, and has also been a reporter and editor at The Toronto Star, The Financial Post and United Press International. His articles have appeared in major newspapers around the world. More


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