Keystone XL and President Obama: history, science and his legacy

From The School of Public Policy, University of Calgary

By: Robert Skinner

Canada and the United States have generally been on the same side of history in confronting threats to our shared values and interests.   We have therefore often found common strategic purpose in developing oil and gas pipeline infrastructure.

In the 1940s, just weeks after the Japanese attack on Pearl Harbor, the two governments agreed on plans to build the Canol Pipeline from Imperial Oil’s Norman Wells field in the Mackenzie Valley to Whitehorse in the Yukon, and on to the Alaskan coast to support the war effort against Japan, which at the time had gained the upper hand in the Pacific war.

In the early 1950s, during the Korean War, the U.S. government determined that oil supply to the west coast was at risk and asked Canada for assistance.  The Canadian Parliament passed an Act to expedite the approval and construction of the Trans Mountain Oil Pipeline from Edmonton Alberta over the mountains of British Columbia to the refineries in Washington State’s Puget Sound.

In the sixties, Canada agreed to a higher, US-set oil price west of the Ottawa Valley in order to maintain access to the U.S. oil market for the surge of oil from new oil fields in Alberta following the Leduc discovery.  The U.S. reluctantly made this exception to its restrictive oil import policy aimed at protecting its oil industry in the lower 48 states.  It was not lost on Washington that US companies produced most of the new Alberta oil so the US agreed to limited imports.

In the seventies, on the eve of Jimmy Carter’s inauguration on January 20 1977, with 90% of Lake Michigan frozen over, snow fell on Miami for the first time in history.  During that extraordinarily cold winter Canada approved emergency exports of natural gas to keep US schools and hospitals open.   Later that year, recognizing the strategic importance of natural gas, Canada and the US signed the Treaty on Principles Applicable to a Northern Natural Gas Pipeline and Canada subsequently passed legislation to expedite construction of an Alaskan Natural Gas Transportation System (ANGTS) across Canada.  While the ANGTS was never built, Canada agreed to build Phase I, the so-called Prebuild in 1982, consisting of two large diameter pipelines to Chicago and San Francisco transporting western Canadian gas to in effect write down part of the eventual cost of the Alaskan system.

In the late eighties Canada and the US signed the Free Trade Agreement that gave the US access to all of Canada’s oil and agreed to pro-rate exports in the event of government-inspired cutbacks.  The US for its part reluctantly granted Canada access to no more than 50,000 b/d of Alaskan crude, the only American source then likely to be of interest to Canada—provided it was shipped in US-flagged tankers.

In the nineties we reconfirmed the FTA in NAFTA.   Today, with Mexico re-opening its hydrocarbon sector, the U.S. stands out on the continent as not much of a free trader when it comes to oil.  Its refusal to lift the 40 year old ban on crude oil exports stands in stark contrast with the policies of its NAFTA partners.

This brings us to the Keystone XL pipeline, a major strategic project for Canada and for the United States.  It would allow more exports to the US Gulf Coast, bolstering continental energy independence—a long standing objective of US energy policy.  But its approval has been stalled for half a decade. President Obama declared last June that approval will be predicated on whether it “will significantly exacerbate the problem of carbon pollution”.   Let’s examine that condition—objectively.  If all 170 billion barrels of oil sands reserves were produced at once using current technologies, the total resulting emissions would equal 157 days of the world’s emissions, or five years’ of the US’s.  So, the pipeline would not exacerbate ‘carbon pollution’.  The oil would also back out imports from Venezuela and Saudi Arabia.  So, from scientific and strategic perspectives Keystone XL makes sense to America.

And might we be encouraged by the President’s avowed principle of making decisions based on science?  On March 9, 2009 when signing the Executive Order allowing stem cell research, he said,

“[Promoting science] is about letting scientists …do their jobs, free from manipulation or coercion, and listening to what they tell us, even when it’s inconvenient — especially when it’s inconvenient.  It is about ensuring that scientific data is never distorted or concealed to serve a political agenda — and that we make scientific decisions based on facts, not ideology”. 

As President Obama reflects on the facts about the Keystone XL pipeline and whether its denial will be his legacy, he should consider a much longer legacy—that of the long-standing relationship between our two countries in confronting threats to our continental strategic and energy interests.  To lightly dismiss that long history of cooperation would say far more about the United States than most Americans would want.

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