Go with Canada: Because we put a price on carbon

By Aaron Wherry - Monday, May 13, 2013 at 2:28 PM - 0 Comments

The Harper government has created a new website to sell Americans on the Keystone XL pipeline. Among the boasts contained therein: that Alberta has put a price on carbon.

Canada’s oil sands are already subject to provincial regulations that are driving investment in new environmental research and bringing emissions down through technological innovation. Alberta has regulations that require large oil sands operators to either reduce emissions or contribute money toward innovative research to improve the environmental performance of the industry.

Indeed, the Alberta government has a “Climate Change and Emissions Management Fund” that prices carbon emissions at $15 per tonne. And Peter Kent recently seemed to suggest that this wasn’t a completely terrible thing.

Amid reports that Alberta might be prepared to increase that price, Erica Alini explained the province’s system last month.

Update 4:33pm. Marc Jaccard explained his objections to Alberta’s approach last month. Andrew Leach reviewed the program for the Canadian Tax Journal last December.

Joe Oliver vs. The world

By Aaron Wherry - Friday, May 10, 2013 at 12:43 PM - 0 Comments

The last three weeks for the Natural Resources Minister have been fun.

Vs. James Hansen, April 24.

A leading climate change activist and former NASA scientist is “crying wolf” with his “exaggerated” comments about the effects of oilsands development on the environment, Natural Resources Minister Joe Oliver charged Wednesday … ”It does not advance the debate when people make exaggerated comments that are not rooted in the facts. And he should know that,” Oliver said to reporters, following a speech to the Center for Strategic and International Studies.

Vs. James Hansen, April 24.

I couldn’t help myself: I asked Oliver what he thought of Hansen’s willingness to chain himself to the White House fence to protest the pipeline. He couldn’t help himself either. Given the dirty oil in California, he replied, “he should be chaining himself to a mannequin in Rodeo Drive.”

Vs. Al Gore, May 6.

Oliver told CTV’s Power Play Monday that Gore’s remarks were “over the top,” but he doesn’t think the prominent Democrat’s criticism will have an impact on Keystone’s approval in the U.S …  “I think that what is happening here is that, as the decision approaches, some of the more strident voices in opposition to the development of hydrocarbons are out there with their exaggerated, over the top comments,” Oliver said in a phone interview from Europe, where he’s lobbying against proposed legislation that would require a reduction in the greenhouse gas intensity of vehicle fuels.

Vs. the European Union, May 9.

Canada’s Natural Resources Minister is raising the prospect of a trade fight with the European Union over its proposal to label oil-sands crude as dirty even as both sides try to seal a major deal to liberalize two-way … “This fuel-quality directive is discriminatory towards Canadian oil and not supported by scientific facts,” Mr. Oliver said.

Vs. some concerned scientists, May 9.

He also took a swipe at a group of scientists who have sent him an open letter raising concerns about the environmental impact of pushing ahead with pipelines and other oil projects. Mr. Oliver said every major resource project has been opposed by some groups. “The position of these scientists is unfortunately unrealistic in the real world because what they want to do is to see a diminution of the use of hydrocarbons and they look upon the oil sands as a symbol, as an example of that,” he said adding that the global demand for energy will increase by 33 per cent over the next 25 years. “Even under the most optimistic scenarios for renewables, hydrocarbons, fossil fuels, will represent at least 63 per cent of the source of energy by the year 2035. So we have to be realistic. The world needs energy.”

Vs. Marc Jaccard, May 10.

“I wouldn’t characterize it as desperate,” Oliver said of the recent barrage of federal emissaries travelling the globe to talk up Canada’s oilsands in the face of projects like the controversial Keystone XL pipeline. Rather, he said, it’s oilsands opponents who are starting to sound panicky. “It’s pretty clear that opponents are getting desperate, hence the shrillness of their arguments, the hyperbole and the exaggeration that we’re hearing from some sources.” …

At the same time, Mark Jaccard, one of Canada’s leading energy economists, is about to take a European tour of his own — to denounce the federal government’s penchant for pipelines at a time when they have no solid plan to reduce emissions from the oilsands. Jaccard’s arguments only serve to undermine Canadian and global prosperity, Oliver said, because they would result in a shortage of affordable energy. “I think there are some people who really have a vision of the world which isn’t realistic,” he said. “They would like to see the world powered by alternative energy. I think that would be great if it could be achieved, but it can’t be entirely, or even to a majority extent.”

Former Liberal prime minister intends to let Americans know the benefits of Keystone

By Bill Graveland, The Canadian Press - Monday, April 29, 2013 at 6:34 PM - 0 Comments

CALGARY – A former Liberal prime minister says he plans to head to Washington, D.C., to speak out in favour of the Keystone XL pipeline.

John Turner, who is 83, says he intends to spend time with Canadian Ambassador Gary Doer before meeting with some leaders in both the U.S. Congress and Senate.

“I may be introducing him to a few people,” said Turner with a chuckle while attending a luncheon speech in Calgary on Monday. “I’d like to meet with the president, No. 1, but I doubt I will get to see him.”

Turner said he is working out the details, but intends to go to Washington as a private citizen.

Continue…

TransCanada says Keystone XL likely won’t be operating until second half of 2015

By Lauren Krugel, The Canadian Press - Friday, April 26, 2013 at 2:59 PM - 0 Comments

CALGARY – TransCanada Corp. said Friday its controversial and long-delayed Keystone XL pipeline will be in service months later than expected and cost more than its current US$5.3 billion pricetag as it continues to await U.S. government approval.

TransCanada (TSX:TRP) had been sticking to its late 2014 or early 2015 start up target, but the longer the regulatory process dragged on, the more difficult achieving that target became. It is now looking at a late-2015 start-up.

The company has said it needs two solid summer construction seasons to get the pipe in the ground.

Continue…

The Commons: Now is not the time for subtlety

By Aaron Wherry - Thursday, April 25, 2013 at 6:32 PM - 0 Comments

It was just two weeks ago, asked about Alberta’s carbon tax, that Peter Kent was moved to muse aloud about a contentious and contested topic. “There hasn’t,” he ventured, “been a great deal of subtlety in talking about carbon pricing.”

Perhaps this lack of subtlety is something like the root cause of our current impasse. Or perhaps this is no time for nuance.

The foreign press is now referring to Joe Oliver as the Canadian “oil minister, which is terribly unfair to the trees and rocks and water he is also responsible for making use of. Of a year-old op-ed, Mr. Oliver is accusing a NASA scientist of “crying wolf” and suggesting that James Hansen ”should be chaining himself to a mannequin in Rodeo Drive,” which would be pointless unless the mannequin was itself nailed down. And now another scientist is likening Mr. Oliver to “a Shetland pony in the Kentucky Derby,” who is “making Canada look like a country full of jerks,” which is terribly unfair to at least the three or four of us who aren’t.

It was on something like this note that Mr. Mulcair stood to harangue the government side this afternoon. Continue…

EPA once again criticizes State Department’s review of Keystone XL pipeline

By The Canadian Press - Monday, April 22, 2013 at 10:41 PM - 0 Comments

WASHINGTON – The powerful U.S. Environmental Protection Agency has once again rebuked the State Department over its positive environmental assessment of TransCanada’s proposed Keystone XL pipeline.

In a lengthy, highly technical letter sent Monday to the top State Department officials overseeing the pipeline permit process, the EPA raises serious concerns about the project’s carbon footprint and criticizes the department’s draft analysis.

It urges the State Department to rethink its finding that the controversial pipeline would not significantly spur production of Alberta’s carbon-intensive oilsands or boost greenhouse gas emissions.

The letter, signed by EPA official Cynthia Giles, said the State assessment included “insufficient information” on environmental issues and added that officials failed to adequately consider alternative routes for the pipeline.

Continue…

Alberta’s carbon price — if you don’t have an opinion on it, you should

By Erica Alini - Wednesday, April 10, 2013 at 5:12 PM - 0 Comments

Etienne de Malglaive/REA/Redux

So Alberta hasn’t really proposed to increase its carbon price to $40, as reported last week. Speaking with Luiza Savage in Washington, D.C. yesterday, Premier Alison Redford said the much debated 40-40 plan isn’t something “we’ve in any way landed on or proposed.” (Read the full interview here.)

You still need to know about Alberta and its system for pricing carbon. Why? Because it might be the blueprint for federal emission regulations for the oil and gas industry that are expected to — forgive the pun — come down the pipe later this year. Alberta and Ottawa are collaborating “intensely” on the upcoming federal rules for the oil and gas industry, Redford told Maclean’s.

But is Alberta’s setup the model the nation should follow? Here’s what you need to know to start making up your mind:

1. Provincial vs. federal regulations, a bit of history.

In 2006 Ottawa let it be known via the Canada Gazette that it intended to regulate greenhouse gas emissions. The approach the government had in mind was the following: target the largest polluters, those with emissions over 100,000 tonnes per year, and use “intensity targets.” That would limit the amount of GHGs per unit of output rather than putting a cap on aggregate emissions. However, the government added, such targets should be “ambitious enough to lead to absolute reductions in emissions and thus support the establishment of a fixed cap on emissions.” (A big hat-tip to University of Alberta professor Andrew Leach here, who wrote this paper.)

Deeds, however, did not follow those words speedily, and a few provinces have since pressed ahead with their own rules. Alberta was the first to put a price on carbon in 2007; a few months later, Quebec imposed a carbon levy on energy producers and a cap-and-trade system in 2011. B.C. followed suit in 2008 with a carbon tax on gasoline and other fuels.

Continue…

Could GOP Congress overrule Obama on Keystone XL?

By Luiza Ch. Savage - Wednesday, April 10, 2013 at 1:28 PM - 0 Comments

Republicans in the House of Representatives today held a hearing on legislation that would do just that in the event that Obama denies a permit for the proposed pipeline from Alberta to the Gulf Coast..

Could they get away with it?

Maybe, reports the Washington Post in an interesting article.

Such a move would raise constitutional division-of-powers questions:

The Congressional Research Service has examined this question in two separate reports, and in a 2012 report, it suggests Congress has just as much a right to weigh in on international pipelines as the president.

That report notes, “Article I, Section 8 of the Constitution authorizes Congress to ‘regulate Commerce with foreign Nations.’ Whereas any independent presidential authority in matters affecting foreign commerce derives from the President’s more general foreign affairs authority, Congress’s power over foreign commerce is plainly enumerated by the Constitution, suggesting that its authority in this field is preeminent.”

Now, just to complicate matters, a 2013 CRS report notes that a 2010 ruling by the U.S. District Court for the District of Minnesota found the president had the right to issue international pipeline permits because Congress had not challenged this authority over a period of several years.

Such a move would trigger lawsuits. And, of course, Obama can veto any legislation out of Congress. So is there enough support in Congress to override a presidential veto with a super-majority vote? Not yet. Notes the Post:

…on March 22 the Senate approved a non-binding resolution in favor of building the project by a vote of 62 to 37, with 17 Democrats voting in favor.

So in the end, can Congress grant a permit to the pipeline even if Obama rejects it? It appears proponents may be able to force the project through, if they can attract a few more Democrats to their side, but they would still have to fight in federal court to seal such a victory.

Full story is here.

Alberta Premier Redford back in Washington to lobby for Keystone XL pipeline

By The Canadian Press - Wednesday, April 10, 2013 at 12:01 AM - 0 Comments

WASHINGTON – Alberta Premier Alison Redford says she’s not a proponent of any individual resource project, even as she’s working the Washington corridors of power this week in favour of the Keystone XL pipeline.

The Alberta government paid to take out a large ad in the Washington Post newspaper Tuesday that called the proposed $7-billion pipeline from Canada’s oil sands to the Gulf Coast “the choice of reason.”

Yet Redford maintains it is the industry’s job to sell any given project, not hers, calling it “a very clear distinction.”

“We do think it’s an important project. It is not my job to be the proponent of that project,” Redford said late Tuesday after a protest-filled forum at the Brookings Institute, a centrist Washington think-tank.

“There is a private company that has a commercial interest, that is going through a process where they are addressing the issues that need to be addressed by decision-makers in the United States,” she said.

Her role, she continued, is to describe Alberta government policy to policy makers in Washington. The current visit, which wraps up Wednesday, was Redford’s fourth such trip in the last 18 months since becoming premier.

Separating policy from sales pitch could get confusing.

Gary Doer, the Canadian ambassador in Washington, walked Redford out onto an embassy terrace overlooking the Capitol for a Tuesday morning photo op where he used the panorama to announce that “down the street, 62 senators, in principle, voted for our favourite project, so onward and upward.”

Doer was referring to last month’s symbolic budget amendment vote, when 62 senators — including 17 Democrats and all 45 Republicans — voted to endorse the Keystone XL pipeline.

That has put wind in the sails of other members of Congress who are attempting to pass the Northern Route Approval Act, which would approve the project while explicitly stating that “no presidential permit shall be required.”

U.S. President Barack Obama is to decide later this year on whether to approve the 1,800-kilometre line, which would take oil from Alberta’s oilsands through the U.S. to refineries and ports on the Gulf Coast in Texas.

The petroleum industry, labour groups and Redford have said Keystone XL is a vital measure to bolster Canada’s economy and ensure a stable source of oil for the United States.

They got a boost recently when the U.S. State Department, in a preliminary report, said rejecting Keystone XL would not reduce greenhouse gas emissions or slow down development in the oilsands.

The fate of the TransCanada (TSX:TRP) line has already been postponed once by Obama amid widespread concerns from environmentalists.

Protesters have demonstrated by the thousands in Washington over not just the potential environmental damage by any leaks from the Keystone line, but also over what the line represents.

They say approving Keystone XL would be a tacit endorsement of the expansion of carbon-intensive operations like the oilsands, causing further damage to the environment through greenhouse gases.

Redford is using her Washington pulpit to tell opponents that stopping XL will not stop oilsands development, while attempting to reassure all that Alberta — and Canada’s federal government — are making headway on environmental policy.

“We think it’s very important to have a price on carbon; we have a price on carbon,” Redford told a question-and-answer forum at the Brookings Institute.

“We’re working very closely right now with the federal government on a new set of oil and gas regulations that will deal with this. Part of that dialogue is talking about what our carbon price can do for technological development and economic growth.”

Redford’s assurances didn’t appear to ease the concerns of a group of anti-Keystone protesters who infiltrated her afternoon speech and repeatedly disrupted the proceedings.

The premier shrugged off the disturbance, saying emotions will rise as the decision gets nearer.

“It is interesting because some of the people who made comments today, they’re valid comments,” said Redford.

“They are important questions to ask and all we’re ever looking for is the opportunity to be able to answer those questions because we’re pretty proud of our record in Alberta.”

Redford’s trip wraps up Wednesday after meetings with senators and members of Congress.

Redford interview: no plan for $40 carbon tax

By Luiza Ch. Savage - Tuesday, April 9, 2013 at 4:33 PM - 0 Comments

Fred Chartrand/CP

Alberta premier Alison Redford is in Washington, DC today to speak about her province’s energy resources and environmental policies as the Obama administration continues to review the proposed Keystone XL pipeline.

She is having meetings on Capitol Hill and gave a speech to the Brookings Institution, in which she made the case that if the cross-border pipeline is rejected, the winner will be Venezuela. Said Redford:

“The opponents of Keystone are, in effect, tilting the playing field in favor of  Venezuela, which would be the biggest beneficiary in the absence of Keystone. If it is not Canadian oil sands in those US refineries, it will be Venezuelan heavy oil. Yet Venezuela’s oil has the same carbon footprint, while Venezuela has little of the environmental policies and commitment that we do in Alberta. And importing oil from Venezuela does far less for the US economy and US jobs than Canadian imports.”

I asked her about reports that her government is planning to raise Alberta’s $15 per tonne carbon price to $40 per tonne as a means to getting American approval for the pipeline project — a price that environmental critics say would be still too low. Below are highlights of our conversation:

Q: Washington, DC is very polarized on the issue of oil sands and Keystone XL. So who is left for you to persuade here on your trip?

A: It’s funny. This is my fourth trip down here in the last 18 months. I was thinking about it on my way down yesterday that in some ways the conversation hasn’t changed. But this happens to be a point in time when people are very focused on this issue. So from our perspective, it’s not about a roster of people we are trying to convince. It’s to make sure that we are present in the discussion. So that as the dialogue changes and more people get engaged, we have more of an opportunity to talk about the issues related to the project.

This is an issue about Keystone but we never come to say, ‘We are proponents of Keystone and please approve the project.’ We come to say, ‘We know that in your considerations with respect to this project you are asking questions about Canada and Alberta – what does environmental sustainability look like? How do you balance environmental sustainability and economic development? What are the priorities for Canada and the U.S.?’ For me, part of that dialogue is to have thoughtful conversations with people so that they understand that we are thinking about the same issues, that our values as Canadians are not different than the values of people who are involved in these issues in the United States.

Q: What is the question you get asked most often?

A: I think that the approach that we’ve taken, which gets a very good response, is we don’t ever have people sit down and interrogate us. But what we say is we’re here to talk about what our environmental record has been in Canada. We have a commitment to ensuring that we are reducing greenhouse gas emissions; that we understand that climate change of course is real; and that there are different approaches to deal with this. You have to ensure that you are developing your energy resources in a sustainable way, you have to ensure you are investing in technology, ensure that your extraction is sustainable; that integrated land use management is important and we understand that you need to have a strong regulatory process with respect to water usage, land management, air quality; that communities matter, and that First Nations matter. We want to be able to talk about the fact we have an integrated approach and have had for well over a decade.

Q: It has been reported that you have a carbon tax plan – the 40/40 plan. Is that a part of your effort to get Keystone XL passed?

A: There are two separate pieces to this. One is that Keystone is a particular project and because people are making a decision around that project, they are looking to see what Canada and Alberta are doing around their environmental record, and so we come and talk about that. This story about 40/40 is sort of – how would I say it – it was reported as ‘news.’ It’s actually part of the work we just do on an ongoing basis with the federal government. This happens to be a point in time when Alberta and Ottawa are working intensely on what our new oil and gas regulations will look like with respect to emissions. So 40/40 isn’t a number that we’ve in any way landed on or proposed. I know that is the story out there. But that’s just a story. It’s very much around what are we doing to make sure we continue to be competitive – that we ensure that we are putting in place an integrated approach to economic development and energy.

This can never be a quid pro quo. This isn’t about saying [to the Obama administration], ‘If we were to make changes, please approve the deal.’ That’s not right. That’s not good public policy. In fact, we have never taken that approach with respect to the work that we do on environmental sustainability. So even though it’s been reported as a particular step or a point in time, nothing has dramatically has shifted. It really is just an evolution, an ongoing dialogue we have with the federal government and industry about what we can do to make sure we are still able to achieve our targets in a competitive way.

Q: So you are saying this did not come out of the effort to approve Keystone?

A: No.

Q: So what was the genesis?

A: There was not a genesis. We have a minister of environment and a minister of energy who meet with their federal counterparts to make sure we are putting in place policies and approach to environmental sustainability that make sense for Canada and Alberta. So it’s not as if there was a point in time that people sat down and said it’s time to make a decision to go in a different direction.

Q: What have you heard from the U.S. administration – how explicit or blunt or vague have they been in saying, “Look, we can’t approve this unless you do more on emissions?” Have you ever heard a message like that?

A: No. I haven’t had any either pointed or vague conversation with respect to these issues that is any different than if I’m sitting in Edmonton and talking to people at a coffee shop. This is what we talk about now, as citizens of the world.

Q: Is 40/40 a specific proposal or a jumping off point? Some environmentalists say you would need $100 per tonne, or $150 per tonne to really get the remissions reductions…

A: But that’s the point. This isn’t a specific proposal. This is part of an evolution with respect to what we do around policy. We’re not negotiating on specifics with environmental groups, we’re not negotiating with anyone. We’re not negotiating on this issue. We are simply developing a policy approach — because at the end of the day, that’s what matters. It has to be sustainable. It has to make sense for Canada’s economy. It has to make sense for Alberta.

Q: So the 40/40 thing is not a policy, it’s just an idea put out there for discussion.. So at the end of the day, it could not happen at all, or it could be a different number?

A: Yes.

Q: So you are collecting input into this?

A: Everyone is. If you were to sit down right now with industry in Alberta they would tell you they run numbers like this all the time. It’s not even related to environmental issues. It could be numbers with respect to this issue or with respect to pipeline capacity or how many rail cars they need to be able to contract to export product.

Q: Is it your expectation that at some point the carbon tax in Alberta will be raised from where it is now?

A: I don’t know. And it’s not a carbon tax, it’s a price on carbon – and that’s different. A carbon tax is when you tax emitters and use the money for whatever government may choose to do. We don’t do that. We have a price on carbon, of $15 per tonne, that goes into a technology fund that is then used to invest in projects that will allow for more sustainable development of the resource. It’s not a carbon tax, it’s a price on carbon. There is a difference.

Q: So do you expect to change that $15 – maybe not to $40, but to something else?

A: I don’t know.

Q: Is there some timeline at which these decisions are being made?

A: No.

Q: So it’s been reported as a new policy but really it’s just an internal conversation?

A: Think about what politicians do every single day, what governments do. We continually try to get ahead of public policy issues.

Q: So this is an internal policy discussion?

A: It’s not even internal. We are talking to industry they are talking to the federal government, and the federal government is talking to us. This is our job. This is what we do.

Q: So you don’t have a particular vision of where this might go?

A: No.

Q: Will you be discussing it here [in Washington, DC] while you are meeting with people?

A: What we’ve talked about is the fund we have in place. There are still a lot of people here who are surprised by the fact that we have legislation that has put a  price on carbon. The governor of Colorado was visiting two weeks ago and I had a chat with him, and he said he didn’t know we had a price on carbon. And it’s important for people to know that.

We’re not down here to pitch a project and say, ‘Boy, if you approve this project, we’ll do all these things.’ What we are here to do is say, ‘We want to tell you what we’ve done because we are proud of what our record has been.” The technology fund, carbon capture and storage, integrated land use planning, ensuring that land, air and water are developed in a sustainable way, an independent monitoring agency that provides real time data, a strong regulatory process. These are all things we’ve already done and we want to make sure people know that.

Q: Do you expect to be coming out with in the next months or a year new steps to get closer to meeting emissions targets?

A: Well, we’re very confident with respect to where we are going already. If there are innovative approaches that allow us to do more, that’s great.

Anti-Keystone donor hosts Obama tonight; Redford to DC next week

By Luiza Ch. Savage - Wednesday, April 3, 2013 at 1:53 PM - 0 Comments

Politico has an interesting profile today of Tom Steyer, a billionaire who is using his wealth to press Democratic politicians on environmental issues, including TransCanada’s proposed Keystone XL pipeline:

The former hedge fund trader-turned-philanthropist is bankrolling a far-flung political operation pushing environmental causes and candidates, including his pricey effort to torpedo the Keystone XL oil pipeline. He’s increasingly drawing scrutiny for trying to take down the Senate candidacy of Massachusetts Rep. Stephen Lynch, a Democrat who has expressed support for Keystone. Steyer is signaling that his efforts against Lynch are just the beginning of an aggressive political expansion that could target Democrats in other races who go against environmental causes.

He’ll be giving Obama an earful tonight:

Steyer and his wife are hosting Obama at their San Francisco home Wednesday night for a $5,000-a-person cocktail reception that will benefit the Democratic Congressional Campaign Committee. The event will be filled with environmental and green-energy donors, who Steyer said won’t hide their feelings about Keystone from the president. “We will certainly talk about what we care about,” said Steyer…

 

Meanwhile, the Obama administration is in the process collecting public comment on their latest environmental impact review of the pipeline, which was considered friendly to the pipeline. The public comment deadline runs until April 22, and includes a public hearing in Nebraska on April 18. After State Department issues a final environmental impact statement, the State Department will have another 90 days to come up with a National Interest Determination. Other departments will then have another 15 days to weigh in, before President Obama makes a final decision on whether or not to issue a permit for the cross-border portion of the pipeline that is to run from Alberta to refineries on the Gulf Coast.

And Alberta premier Alison Redford is expected in Washington, DC next week. According to the Brookings Institution, a Washington, DC think tank:

On April 9, the Energy Security Initiative at Brookings will host Alison Redford, the premier of Alberta, for a discussion on the the Alberta-U. S. energy relationship, environmental efforts undertaken by her administration, and the Keystone XL pipeline.

Senior Fellow Charles Ebinger, director of the Energy Security Initiative, will provide introductory remarks. Brookings Trustee Daniel Yergin, chairman of Cambridge Energy Research Associates, will moderate the discussion with Premier Redford to include questions from the audience.

The event will be webcast and can be live Tweeted at hashtag #AlbertaUS.

Arkansas spill shows ‘nightmare scenario’ if Keystone approved, group warns

By The Canadian Press - Monday, April 1, 2013 at 9:20 PM - 0 Comments

CALGARY – A crude oil leak from an ExxonMobil pipeline in Arkansas comes at a particularly bad time for the Canadian company looking to build the contentious Keystone XL pipeline through the American heartland.

TransCanada Corp. (TSX:TRP) hopes it’s in the home stretch of a years-long process to win U.S. government approval for its multibillion-dollar project, which has been assailed by environmental groups for its potential impact on everything from fresh water sources to climate change.

The spill from ExxonMobil’s Pegasus pipeline is likely the last thing TransCanada needed, with the U.S. State Department being months away from issuing a final decision on Keystone XL after repeated delays, said Queen’s University professor Warren Mabee.

“I think that just is another set of bad publicity that Keystone is going to have to overcome,” said Mabee, director of the Institute for Energy and Environmental Policy at the university in Kingston, Ont.

“As we move towards a decision, this just becomes another hurdle for a new project to overcome — the idea that maybe these pipelines aren’t as safe as they’re made out to be.”

The leak from the Pegasus pipeline in no way changes the facts around the safety of Keystone XL, said Mabee, yet “politically, this is a big problem.”

“If it was purely down to the facts, the decision would come down easily on the side of the Keystone. That project would be approved,” said Mabee.

“If you have a president or a State Department that is looking for excuses to either put this project on hold or to justify cancelling it, this works right into that argument, unfortunately.”

Jim Murphy, senior counsel at the National Wildlife Federation, said the Pegasus spill serves as a “sad illustration” of the risks associated with oil pipelines.

“I think it certainly highlights the nightmare scenario that’s playing out in a lot of minds along the (Keystone XL) route,” he said.

In Arkansas, it doesn’t appear at this point that the oil has reached any major water sources in the area, said Murphy.

“We certainly hope there’s no impact to water, but the fact that this much oil was able to spill so near important water bodies I think really indicates that if that oil doesn’t reach water bodies, it’s more luck than anything else.”

Pegasus carries 96,000 barrels per day from Patoka, Ill. — a major destination for Canadian crude, including that from the oilsands — to the U.S. Gulf Coast.

Keystone XL would dwarf that in size, with an initial capacity of 830,000 barrels per day.

ExxonMobil says as of Monday, some 12,000 barrels of oil and water had been recovered and crews continue to work on the cleanup. It says “a few thousand” barrels of oil could be seen in the area, but it’s prepared to respond to a leak of 10,000 barrels.

The company is working on a plan to excavate and remove the broken pipeline.

Nearly three years ago, a spill from an Enbridge Inc. (TSX:ENB) pipeline in southern Michigan fouled part of the Kalamazoo River.

Although the NWF has been pushing for stronger pipeline safety regulations and response procedures, Murphy says those projects should not be built at all.

“We still have not changed our bottom line that tarsands oil is too risky and is just too destructive a fuel source for us to be developing and transporting.”

TransCanada spokesman Shawn Howard called the Pegasus leak an “unfortunate circumstance” that “demonstrates the pipeline industry must continue to focus on the safe, reliable operation of its energy infrastructure.”

“The fact remains that pipelines are the safest way to move oil and other products to markets to meet consumer demands and maintain our quality of life,” he said.

“TransCanada plans on building the most advanced, state-of-the-art pipeline that has been built to date using the latest technology, highest strength steel and most modern welding techniques.”

He said 57 new safety procedures, including remotely controlled shutoff valves and increased pipe inspections, should instill further confidence that Keystone XL will be operated safely.

The $5.3 billion Keystone XL pipeline would carry crude from Alberta to the U.S. Midwest and Nebraska, connecting with another $2.3-billion pipeline currently under construction between Oklahoma and the Texas. Those two pipelines were initially part of one project, but TransCanada decided to tackle them separately when Washington rejected its earlier proposal last year.

TransCanada refiled a new application with a reworked route through Nebraska, where there were concerns pipeline construction could damage a fragile ecosystem of grass-covered sand dunes and threaten a major aquifer.

A draft environmental report from the State Department last month flagged no major issues with the rejigged route. It will issue a final report after a comment period.

Lawrence Summers on Keystone, Mark Carney and lessons from financial crises

By Jana Juginovic - Monday, April 1, 2013 at 2:36 PM - 0 Comments

Lawrence H. "Larry" Summers, former U.S. Treasury Secretary speaks at the London School of Economics in London, U.K., on Monday, March 25, 2013. (Jason Alden/Bloomberg).

For the first time since the 2007 financial crisis, investors pushed the Standard & Poor’s 500 index into record territory before closing for the Easter weekend. U.S. stocks have rebounded despite vulnerabilities in Europe and the slow pace of the U.S. economic recovery. While investors are riding a wave, many are wondering why it is taking so long for economic output, consumer demand and employment to return to pre-recession levels.

According to Lawrence Summers, former director of President Barack Obama’s National Economic Council and former U.S. Treasury Secretary — he is also President Emeritus of Harvard University at the top of a shortlist of potential candidates to replace current chairman of the U.S. Federal Reserve Ben Bernanke — the events of the last few years have thrown into question much of what he learned and taught about coherent economic models.

Earlier this week, as Europe was in the throes of yet another crisis, this time centred in the tiny island of Cyprus, Summers told an audience at the London School of Economics that the thinking on how markets function and recover has changed. Summers was joined in the rare panel discussion by Fed Chairman Bernanke, Bank of England Governor Mervyn King and Axel Weber, former president of Germany’s central bank. Canada’s own central banker, Mark Carney was in the audience.

“The events of the last years suggest that the traditional breakdown between the structural and the cyclical that is central to economic thinking has become highly problematic. If there is anyone in this room that believes that a reasonable forecast for the U.S. or British economy at any future date would be represented by a trend line constructed through to 2007 from any previous point, I have a bridge I want to sell you,” Summers quipped.

Fourteen years ago, Summers was one in the trio of economists Time magazine anointed “The Committee to Save the World.” The other two members of the superhero league were then-Federal Chair Alan Greenspan, and U.S. Treasury Secretary Robert Rubin — Summers was deputy U.S. Treasury Secretary and became treasury secretary later that year. At the time, the troika was credited with saving the world’s financial markets from collapse and slowing the spread of the “Asian Contagion,” a wave of financial market panic that began with the rapid devaluation of Thailand’s currency and spread to other parts of Asia, Russia and Latin America, soon affecting the real economy as well. The U.S. appeared inoculated from the financial stresses afflicting other parts of the world, posting record GDP growth rates of five per cent.

Fast-forward to 2008, though, and the U.S. economy was teetering on the verge of the abyss. The committee no longer seemed so infallible — worst still, it looked guilty. As Bloomberg’s Ian Katz wrote, “their model of unfettered capitalism eventually invited disaster. The trio’s deregulatory approach encouraged banks to take risks that later threatened the U.S. financial system.”

For his part, Summers says the moniker bestowed on the three was unrealistic: “I think if anyone had the idea that somehow it was given to bankers or economists to make the world always be stable, that was a very bad idea.”

In conversation with Maclean’s, Summers spoke about lessons learned from the financial crisis, as well as Carney’s new job as Britain’s central bank governor and the Keystone XL.

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The Commons: Keystone XL and Peter Penashue are both great

By Aaron Wherry - Tuesday, March 19, 2013 at 6:46 PM - 0 Comments

Thomas Mulcair wanted to talk about tax havens and about how Kevin Page had been blocked from studying the issue and how the Canada Revenue Agency has apparently identified more than 8,000 “offshore tax cheats” (to use Mr. Mulcair’s phrasing). The Prime Minister wanted to talk about what a terrible thing Mr. Mulcair had done.

“I am rather surprised to be getting a question like this on the economy from the leader of the opposition after he travelled to Washington to fight against Canadian jobs,” Mr. Harper pleaded with a shrug and a shake of the head after offering a perfunctory sentence in response to the actual question asked.

“Shame!” called a voice from the Conservative side.

“The NDP can oppose Canadian jobs,” Mr. Harper concluded, “but on this side we are for Canadian jobs.”

The Conservatives stood to applaud their man’s clarification.

Mr. Mulcair ad-libbed a retort. “ Mr. Speaker, his project includes the export of 40,000 Canadian value-added jobs,” he declared, proceeding then to jab his finger toward the ground. “We will keep standing up for Canada.”

The New Democrats stood to applaud.

So we are split on the precise value to Canada of the Keystone XL pipeline—one of these men is categorically in favour, the other has his concerns; about half of the country sides with the former, a little less than that sides with the latter. Perhaps cap-and-trade, which both of these men have supported at one time or another and which the American president also happens to prefer, truly is the reasonable solution to this concern. If only Republicans didn’t control the House of Representatives and Mr. Harper hadn’t decided that what he once supported was the same as what he once opposed.

Instead, we come to what seems a defining fight for these two men.

Mr. Mulcair, now en francais, returned to his concerns about tax evasion. According to the main estimates, he noted, the budget of the Canada Revenue Agency was due to be cut by $100 million. Mr. Harper, in response, managed two sentences in French, before switching back to English, his preferred language for haranguing. Continue…

Keystone fears resonate along New England oil pipeline

By The Associated Press - Sunday, March 17, 2013 at 6:10 PM - 0 Comments

SUTTON, Vt. – The Canadian energy industry insists it has no plans to reverse the flow of a pipeline that carries crude oil from Maine to Montreal, but that has done little to reassure New England towns that oppose the idea and the 18 members of Congress asking for a full environmental review.

Environmentalists in the U.S. and Canada started raising the alarm about oil they call “tar sands” or “oil sands” being moved through northern New England several months ago.

“It’s a climate-destructive fuel, and Vermont is committed to clean energy,” said Jim Murphy, of the National Wildlife Federation. “We don’t want to be the pass-through for climate-destructive fuel.”

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Keystone XL: Stimulus for the Conservative party’s internal economy

By Aaron Wherry - Friday, March 15, 2013 at 12:47 PM - 0 Comments

Democrat minority leader Nancy Pelosi pronounced yesterday that “Canadians don’t want the pipeline in their own country” and John Baird is terribly concerned that Thomas Mulcair might be saying bad things about Canada in the presence of Americans.

An NDP source tells me Mr. Mulcair did not tell Ms. Pelosi that Canadians don’t want the pipeline.

Do Canadians want Keystone XL to go through? In November, Abacus found 53% in favour and 47% against. In January, Nanos found that 45.2% had a favourable impression, while 41.7% of respondents had an unfavourable impression.

Meanwhile, the Wall Street Journal reports that the Conservative party is seeking donations in response to the NDP’s stance on Keystone.

“Instead of supporting this pro-Canada project, NDP leader Thomas Mulcair traveled to Washington and did what the NDP always do when travelling abroad–attack Canadian jobs,” reads the letter, written by the Conservative Party’s director of fundraising. “Will you chip in $5 or whatever you can afford and stand against Mulcair’s NDP?,” the letter said.

And Bob Rae believes Keystone XL is in the national interest.

A simple way to save Keystone XL

By James Cowan - Friday, March 15, 2013 at 7:46 AM - 0 Comments

Is it too much to expect our Conservative government to behave like conservatives? After nearly seven years in power, and repeated abnegation of their principles—on foreign ownership, on military procurement, on corporate subsidies—should we abandon any hope of intellectual consistency from our governing party? Allegations that Prime Minister Stephen Harper has some hidden, extremist right-wing agenda now seem farcical. If the government has any ideology, it is only pragmatism—and then only aimed at re-election. Treehuggers should beg the Conservatives to rediscover their zealotry. Far from hurting, it would buoy many environmental causes if Conservatives started acting the part.

Consider the brinkmanship over the Keystone XL pipeline, which would carry Albertan oil to Gulf Coast refineries in the United States. President Barack Obama clearly wants to use the project to prove his seriousness in tackling climate change. U.S. Ambassador David Jacobson has repeatedly said improving Canada’s environmental record would make his country more accepting of oilsands imports. In the marble-mouthed world of diplomacy, this is a crystal-clear quid pro quo: tidy up the oilsands a bit and we’ll happily accept your little pipeline.

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If you love Canada, do you also have to love Keystone XL?

By Aaron Wherry - Thursday, March 14, 2013 at 2:15 PM - 0 Comments

Thomas Mulcair has gone to Washington and criticized the Harper government’s environmental policies and questioned the benefits of the Keystone XL pipeline and this has upset Brad Wall, Ed Fast, Joe Oliver, James Moore and Michelle Rempel.

The “national interest,” of course, is in the eye of the beholder.

Premier Wall and the Harper government (and the Saskatchewan NDP) believe Canada would be better off with the Keystone XL pipeline. Thus, championing the pipeline is speaking in the national interest. The NDP’s position on Keystone XL, conversely, seems to be that the oil would be better put to use in Canada and that there need to be better policies governing the environmental impacts of the oil sands. Along those lines, Mr. Mulcair would probably argue that he is speaking in the national interest.

So is Keystone XL in the national interest? Shawn McCarthy looks at Mr. Mulcair’s logic on job creation. And Clare Demerse looks at the Harper government’s environmental record. President Obama, meanwhile, allegedly thinks “the Canadians” are going to get rich.

As for how an opposition leader should speak when abroad, that’s also a tricky matter. When Mr. Harper went to Washington in 2005, he criticized the Liberal government for not spending enough on defence, peacekeeping and foreign aid, spoke with the President about the possibility of missile defence and, at a news conference, suggested the Liberals were associating with groups that had terrorist affiliations. He probably could have claimed to have been speaking in the national interest in each case.

Prentice says Keystone XL pipeline is in U.S. national interest, urges approval

By The Canadian Press - Wednesday, March 13, 2013 at 5:09 PM - 0 Comments

NEW YORK, N.Y. – Former Conservative cabinet minister Jim Prentice says the Keystone XL oil pipeline is in the U.S. national interest and that President Barack Obama should let it be built.

The speech by Prentice, now a senior executive at CIBC, stresses the importance of the Canada-U.S. relationship and argues the two countries must work together to achieve North American energy independence.

“Stated simply, I am strongly of the view that President Obama should approve the Keystone XL pipeline on the basis that it is in the national interest of the United States,” he told the Financial Times Forum in New York.

“I say this because North America is accelerating towards a future of energy independence and the Canadian oilsands are an essential part of the North American energy marketplace.

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Good news, bad news

By macleans.ca - Thursday, March 7, 2013 at 3:00 PM - 0 Comments

Daniel Irungu/EPA/Keystone Press

Here comes the sun

The Keystone XL pipeline won’t spark more feverish oil sands activity in Alberta, as environmentalists charge, and competing options to get our crude into the U.S., such as by rail or truck, would be even dirtier. So says a U.S. State Department report, which also approves of the pipeline’s proposed new route to Texas. All reason for optimism in Canada’s energy sector. So is a Royal Dutch Shell report (which greens will hail, too) predicting solar power may become the world’s largest energy source by 2070. The forecast assumes soaring energy prices and admits the crucial role unconventional energies—including the oil sands—will play in the future.

Can we try this in Canada?

A Dubai father has successfully sued a private school for more than $21,000 after he proved it failed to properly educate his young son. Seeking compensation for two years’ worth of registration fees, he accused the school of negligence for allowing the child to pass the first grade despite poor marks—negligence that led to emotional distress. A court-appointed education expert assessed the child and agreed.

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Saskatchewan Premier Brad Wall makes environmental case for Keystone XL

By Luiza Ch. Savage - Thursday, March 7, 2013 at 11:40 AM - 0 Comments

Saskatchewan Premier Brad Wall is in Washington today to press the case for the Keystone XL pipeline and to try to burnish Canada’s green credentials.

“We’re here principally to make the environmental case,” said Wall, who has been meeting with U.S. officials and lawmakers. The premier is giving speeches promoting Canada’s environmental record and  touting Saskatchewan’s clean-coal project which will capture carbon emissions from a coal-fired plant in North Dakota and pump it underground. (Carbon emissions from coal-fired plants are a leading source of carbon emissions in the U.S. “There is one coal-fire plant in Georgia that media reports say generates as much greenhouse gases as three-quarters of the oil sands,” said Wall.)

Wall said the U.S. State Department’s environmental report released Friday suggested “we are close to approval,” adding that Canada could give the president more leverage.

“We need to give them as much environmental elbow room as possible,” he told reporters at a breakfast near Capitol Hill this morning. “So to help with that elbow room, we are talking about our record in Saskatchewan.” He also mentioned Alberta’s carbon tax and the federal government’s promised emissions regulations for the oil and gas sector, which have not yet been announced.

He said Canadian advocates should shift from making economic and energy security arguments for the pipeline. ”We really need to make more of an environmental case for this project,” he said. “There is a record that I would argue that is as aggressive, or maybe more than you would find here, in terms of energy and the environment, but we haven’t talked about it much.

“If the president can’t point to the fact [and say,] ‘Look, here’s what Canada’s doing. In many respects it’s more than is happening here, and more than what is happening in many countries in the world,’ then I think it helps the administration make a decision that I think now is lacking a lot of barriers,” he said. “I think that’s maybe some of the environmental elbow room we can give to the administration to make the decision; [that is,] to say we care about the issue — and we are putting our money where our mouths are,” said Wall.

Saskatchewan doesn’t have oil sands, but Wall says the province is directly affected by the project because it produces conventional oil that would be carried in the pipeline. Without access to the pipeline, Saskatchewan oil currently sells at a discount of 19 per cent, costing the provincial Treasury $300 million in lost revenue, Wall said. He emphasizes that up to 15 per cent of the oil in the proposed pipeline would be conventional oil.

But linking the decision to Canadian environmental policy is a delicate task. Afterall, it was Wall who responded with indignation when U.S. ambassador David Jacobson gave a speech implying Canada could make the decision easier for Obama by taking more climate action of its own. Wall penned a letter to Jacobson questioning those remarks. Today Wall said the ambassador’s comments seemed to imply a “quid pro quo” exchange of pipeline approval for tougher domestic regulations. “That kind of linkage — I don’t think it’s helpful,” he said. “We got a response back from ambassador and we’ll take them at their words that is not the case.”

Wall added that Canada must do more to publicize existing policies. “It’s not a quid pro quo. This is what we’re doing already. (…) These things are happening not because we’re trying to get Keystone approved,” he said. “We haven’t done a good job of talking about them. I freely admit we should have been doing a better job in this city, this country [saying] — here’s the economic case, here’s the energy security and oh, by the way, we care about the environment and here’s what we’re doing with respect to the environmental piece of this. We should have been on it sooner, but we’re on it now.”

Yesterday, he met with members of Congress, mostly Republicans who support the pipeline. But he did have a 10-minute “hallway meeting” with Massachusetts congressman Ed Markey, a leading Democratic climate hawk in the House of Representatives. He said Markey asked if  the pipeline was really aimed at exporting Canadian oil beyond the U.S. (Wall says most of the oil would stay in the U.S. but some refined products would be exported.) Today, Wall gives a speech at the Woodrow Wilson Center (video), and  meets with Democratic senators and Kerry-Ann Jones, the assistant Secretary of State, who has been leading the Keystone XL review. He’s inviting them all to Saskatchewan.

Keystone XL supporters say report shows pipeline should be approved immediately

By The Associated Press - Saturday, March 2, 2013 at 3:23 PM - 0 Comments

WASHINGTON – A new U.S. State Department report is the latest evidence that the long-delayed Keystone XL oil pipeline from Canada should be approved, supporters say.

The draft report, issued Friday, finds there would be no significant environmental impact to most resources along the proposed route from western Canada to refineries in Texas. The report also said other options to get the oil from Canada to Gulf Coast refineries are worse for climate change.

The pipeline plan has become a flashpoint in the U.S. debate over climate change. Republicans and business and labour groups have urged the Obama administration to approve the project as a source of jobs and a step toward North American energy independence. Environmental groups have been pressuring the president to reject the pipeline, saying it would carry “dirty oil” that contributes to global warming. They also worry about a spill.

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Keystone XL gets blessing from U.S. State Department, clears major hurdle

By The Canadian Press - Saturday, March 2, 2013 at 12:15 AM - 0 Comments

WASHINGTON – The U.S. State Department says rejecting TransCanada’s Keystone XL pipeline would neither put the brakes to Alberta’s oilsands development nor significantly diminish greenhouse gas emissions, critical findings that could help the White House green-light the controversial project.

The pipeline “remains unlikely to significantly impact the rate of development of the oilsands or the demand for heavy crude oil in the United States,” a State Department official told reporters in a conference call Friday minutes after the release of its long-awaited environmental assessment of Keystone XL.

Canada will tap its lucrative oilsands “with or without the proposed project,” the State Department’s voluminous analysis reads.

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Keystone XL gets blessing from U.S. State Department, clears major hurdle

By The Canadian Press - Friday, March 1, 2013 at 6:37 PM - 0 Comments

WASHINGTON – The U.S. State Department says TransCanada’s Keystone XL pipeline won’t have a major impact on Alberta’s oilsands development, a critical finding that could make it easier for the White House to green-light the controversial project.

The pipeline “remains unlikely to significantly impact the rate of development of the oilsands or the demand for heavy crude oil in the United States,” a State Department official told reporters in a conference call Friday mere minutes after the draft report was released to the public.

Canada will develop its lucrative oilsands “with or without the proposed project,” the State Department’s draft analysis reads.

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