Energy Ink

Alberta Premier Alison Redford caught in political crossfire

January 18, 2012

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Republicans, it turns out, made an unwise bet. As recently as this past Sunday, the party’s more ardent members were full of bluster, vowing to intensify their push to see TransCanada Corp.’s Alberta-to-Texas Keystone XL pipeline built ahead of a Feb. 21 deadline they had set in exchange for agreeing to an extension to a payroll tax cut. “I want to wake up talking about Keystone pipeline and I want to go to bed at night talking about Keystone pipeline,” Arkansas Representative Tim Griffin told the New York Times.

He can look forward to a few sleepless nights. Reports began circulating early this morning on Twitter that the $7 billion-plus oil sands artery was in jeopardy. The U.S. State Department confirmed the chatter this afternoon, noting in a decision that Keystone XL is not at present in the U.S. national interest.

Predictably, TransCanada shares have tumbled. Project opponents have claimed victory, although Reuters had reported earlier today that Republicans had already begun looking for ways to circumvent the decision, and that TransCanada could reapply for a permit once it settled on a new route that bypassed Nebraska’s Sand Hills region. Indeed, the State Department noted that its “denial of the permit application does not preclude any subsequent permit application or applications for similar projects.”

The backdrop to this unfolding drama continues to be jobs. TransCanada said today it will put together a new application in anticipation of a planned in-service date of late 2014. “This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed,” company chief executive Russ Girling said in a statement.

U.S. unemployment began 2012 hovering at 8.5 per cent. Presumably aware that officials with the State Department never quite bought its initial assessment that Keystone would create some 20,000 new jobs, TransCanada this month released what it called a detailed breakdown of employment impacts related to construction of the pipeline. Ironically, perhaps, the Obama administration’s own Jobs Council yesterday  emphasized the importance of allowing “more access to oil, natural gas and coal opportunities on federal lands” as a way to spur employment.

The council also encouraged the administration to make the most of its natural resources by building pipelines, transmission links and distribution networks to deliver electricity and fuel to markets. From the report:

The Council recognizes the important safety and environmental concerns surrounding these types of projects, but now more than ever, the jobs and economic and energy security benefits of these energy projects require us to tackle the issues head-on and to expeditiously, though cautiously, move forward on projects that can support hundreds of thousands of jobs.

White House spokesman Jay Carney was evasive yesterday when pressed by a reporter about whether such a description might describe Keystone XL. “You’re trying to conflate something here that the Jobs Council didn’t say,” he said.

Yet it is a connection that Republicans are keen to make.

The decision to sideline Keystone XL indefinitely fits with the narrative emanating from the GOP’s rhetorical fog machine that says Obama is a job killer. Republican leadership contenders have been quick to reinforce that view, Jennifer Rubin writes at the Washington Post. For his part, Obama released a statement today blaming a “rushed and arbitrary” deadline set by Republican lawmakers for preventing “a full assessment of the pipeline’s impact.”

Caught in the middle of the American election cycle is Alberta Premier Alison Redford. The Keystone delay comes as hearings into another export scheme, Enbridge Inc.’s Northern Gateway, have become unduly politicized by federal Natural Resources Minister Joe Oliver. Redford remains confident that the Gulf Coast still makes sense as a destination for Alberta crude, even as the province seeks new outlets for growing oil sands production in the Pacific Rim. Keystone XL is “important for Alberta’s economy and Canada’s economy,” she said at an afternoon press conference, undaunted, evidently, by ongoing political wrangling. “I actually believe that it is still entirely possible for this project to proceed.”

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