What does THIS mean for the Keystone XL pipeline?

It's been noted by advocates of the Keystone pipeline build from Canada to the Gulf Coast that if the pipeline isn't built the Canadian oil will be sent instead to markets in Asia, most particularly China.  While the president continues to ignore and dither over the Keystone build, something happened to Canada's alternate option for its oil experts.

British Columbia, a fairly pristine province, decided it didn't want any part of the Northern Gateway pipeline ostensibly because of environmental protection concerns.  The pipeline was intended to bring the oil from oil rich province of Alberta to the Pacific coast at Kitimat, British Columbia (well north of Vancouver) seaport for tanker shipping overseas.  But the plan has hit a snag.

In its final submission to the Northern Gateway Pipeline Joint Review Panel, B.C. says it cannot support the project as presented because proponent Enbridge Inc. has been unable to address British Columbians’ environmental concerns.

“We have carefully considered the evidence that has been presented to the Joint Review Panel,” B.C. environment minister Terry Lake in a statement. “The panel must determine if it is appropriate to grant a certificate for the project as currently proposed on the basis of a promise to do more study and planning after the certificate is granted. Our government does not believe that a certificate should be granted before these important questions are answered …‘Trust me’ is not good enough in this case.”

While environmental organizations applauded the tough talk, B.C. also said its position on Northern Gateway is not a rejection of heavy-oil projects. It says all proposals, such as Kinder Morgan’s Trans Mountain Pipeline Expansion or David Black’s Kitimat Clean refinery project, would be judged on their merits.

 While that seems like it's the end of the alternative pipeline and environmentalists have won, it isn't.  Canada will not allow itself to be stuck sitting on a wealth of oil unable to pipeline it to the United States or China, both pipelines are likely to go through eventually.  This is just a setback.  Here's what it really means for both pipelines.

Firstly, not all opposition to the pipeline in British Columbia is environmental.  There is no doubt an underlying profit-sharing motivation from British Columbia.  The government is undoubtedly looking at royalties from Enbridge (the pipeline's owner) in order to allow the pipeline and to prepare for potential risks.  In other words, it comes down to money - they want a bigger share of it.  The government is using the environment as a bargaining chip right now.  What that means for Keystone is a little more tricky.

Environmentalists in the United States now have a new weapon in their arsenal.  They can argue that Canada won't even build pipelines in their own country so why should the United States allow these clearly 'unproven' pipelines to run through so many states?  They can use that as cudgel to hit president Obama on the Keystone decision.  While the president is not up for re-election, Democrats in 2014 and 2016 will be.  If Obama cares about his liberal agenda more than his own legacy (which is debatable) he might just be swayed if he thinks the environmental constituency is larger than the union jobs constituency.  Again, Obama prior to the election didn't make that call, and while he can now, he may try to figure out a way to thread the needle or at least stall as long as possible.  He's voted present on this issue for some time now.

On the other hand, this presents a bargaining chip for those who would see the pipeline built in the U.S.  After all, you could get concessions because you now know Canada's Plan B has been partially derailed.  

In effect, this has turned all of this pipeline development into a five way poker match between Enbridge, British Columbia, TransCanada (the company behind the Keystone XL pipeline), environmentalists and the U.S. government.  Who folds, who bluffs, and who eventually wins will have to wait until the hands get played.

Really?

The most undeserved photo op ever:

Remember, you like me.

The president has the gall to stand in front of pipes to announce he's approving the southern leg of the Keystone XL pipeline (after the horse has left the barn).  He's also fond of taking credit for the largest oil production in U.S. history due entirely to the approvals and actions of his predecessors and not in any way, shape or form to his efforts.  Not...at...all.

Some people still fall for this trickery.  Of course years in, they were able to find people who hadn't heard about the O.J. Simpson trial too.

Obama's Horse Already Out Of The Barn

When you close the barn door after the horse has escaped the barn, you aren't really doing any good. Such is the case for Obama with regards to the Keystone XL pipeline.

The decision to go ahead or not with the Keystone XL pipeline should have been made long ago. After years of obfuscation and delay, it should have been made on the last scheduled timeline and not put off until after the 2012 elections.

Obama will choke on this

A proud tradition of protesting intelligent decisions since the 1960s.

Via The Globe and Mail;

TransCanada Corp. (TRP-T42.390.390.93%) said it will spend $2.3-billion to immediately build the southern leg of its proposed Keystone XL pipeline, aiming to fill a shortage of crude supply to refineries while the company works to make the full Alberta-to-Texas line a reality.

Calgary-based TransCanada plans to connect the major North American oil hub at Cushing, Okla., to the Texas Gulf Coast, where giant heavy oil refineries are running under capacity due to shipping constraints from Cushing. The bottleneck has weighed on prices for crude shipped to Cushing, as supplies in storage grow.

While Canada is working on a deal with China, unlike the president, they haven't given up on the U.S. oil market.  What does the president do next? Get spiteful and say that there is no way the oil will ever flow from Western Canada to the Gulf Coast? Or does he cave?  Neither option is politically viable so perhaps he avoids the issue for as long as possible or else he tackles it "head on" by saying another review is still needed and this changes nothing.

That's what happens when you paint yourself into a corner.  The president has left all of the moves with TransCanada and his Republican opponents all the while satisfying no one in his base.  It's heartening to see that no one is knuckling under to the president's ham-fisted mismanagement of this whole episode in America's energy saga.

Canada-China oil talks in high gear

A quick update on the failure of the Obama administration to make a decision on the Keystone XL pipeline which would bring Canadian oil to the Gulf coast for refining.  Canada is in talks with China - today.

Canadian oil and business executives are well-represented in the delegation travelling to China with Prime Minister Stephen Harper, since oil exports are expected to be high on the government's agenda.

A delegation assigned to Natural Resources Minister Joe Oliver includes eight mining or oil and gas companies.

Harper's own delegation includes a wider businesses focus, with top executives from Air Canada, SNC Lavalin and Bombardier, Manulife and Scotiabank.

Foreign Affairs Minister John Baird and Agriculture Minister Gerry Ritz will also visit China.

China's total investment in Canada used to add up to millions of dollars, but since 2009 has increased to up to $20 billion.

It has come with a shift in this country from relying solely on the United States as the only buyer of Canadian oil and gas — something Harper emphasized repeatedly when U.S. President Barack Obama delayed a decision and then denied a permit to TransCanada for its Keystone XL pipeline. The pipeline would have sent oil from Alberta through the U.S. to the coast of Texas.

The president would like to pretend there are no consequences to his non-decision on the pipeline.  He's wrong. These talks, while always an option that would be considered, are moving forward faster as a direct result of the president's delays.

You know, the GOP won on Keystone XL

snookered.

The president's Assistant Secretary, Bureau of Oceans and International Environmental and Scientific Affairs, Kerri-Anne Jones laid out the case, as weak as it was, for declining to go ahead on the Keystone pipeline.

We wanted to talk today about the announcement that we have made. As you know, today the Department of State recommended to President Obama that the presidential permit for the proposed Keystone XL pipeline be denied and that at this time the TransCanada Keystone XL pipeline be determined to not serve the national interest. The President agreed with the Department’s recommendation. This recommendation was predicated on the fact that the Temporary Payroll Tax Cut Continuation Act that was passed in December does not provide sufficient time to obtain the information that we think is necessary to assess whether the project, in its current state, is in the national interest.

As you – many of you know, we made a decision on November 10th that we needed additional information regarding this project, specifically about alternative routes through Nebraska. And we base this decision now on the fact that we don’t have time to get that information, information we think is essential for making a well-informed decision.

The more I think about it, the more I think the president got snookered by the GOP on the Keystone pipeline.  He was forced to decide on behalf of the environmentalists and against the unions pushing him to support it for jobs.  He couldn't let the GOP win the war of ideas.  The GOP could say they forced the president to back their efforts on jobs.  That's the last thing he wanted.

Obama re-kills Keystone pipeline

Really?  Think again.

President Obama had his hand called on the Keystone pipeline that he had hoped to stall until 2013, after the election.  The Republican congress tried to force his hand but president Obama has still found a way to stall which has been the primary objective all along.

In a decision sure to re-ignite a fierce energy debate, the Obama administration was announcing on Wednesday its rejection of the controversial Keystone XL pipeline because the 60-day deadline imposed by Republicans did not allow adequate time to review an alternate route through critical wetlands in the Midwest.

Deputy Secretary of State William Burns was to make the announcement on the project that would carry oil from Canada's carbon-heavy tar sands to refineries on the Gulf Coast and would indicate that TransCanada, the company seeking to build the $7 billion, 1,700-mile pipeline, will be able to reapply with a new route avoiding an ecologically sensitive area of Nebraska, sources told National Journal.

The president didn't miss the opportunity to blame the Republicans for his decision.  The National Journal is more than happy to carry his water in the wording;

Put more simply, the Obama administration is hitting Republicans back by saying no because of their forcing him to decide on the project in just 60 days. Republicans in Congress and on the campaign trail promptly painted the decision as a rejection of thousands of American jobs purely for political reasons.

Only 60 days? Firstly the pipeline proposal has been around far longer than 60 days.  Secondly what more information is possibly justifiably needed to make a decision.

It's your decision Mr. President, own it.  Stop saying it's above your pay grade. Don't blame Bush, Don't blame Republicans.  You made a tough decision (of course you made the wrong side of a tough decision) - so take ownership.  Either that, or come out and admit you are just stalling.

Keystone bends but not the White House

According to a Fox News report, TransCanada is willing to re-route the Keystone pipeline after the Obama administration said it needed at least another year to assess the environmental implications of running the pipeline through some environmentally 'special' areas.  You would think that would be a big step forward considering that the alternative being openly contemplated is for Canada to sell that 700,000 barrels of oil per day (approximately 3.5% of U.S. daily consumption), oil to the Chinese.  But that's not the case.

Unintended Consequences of Obama's Keystone punt

Obama administration Keystone Cops.

There have been numerous pieces on Unintended Consequences both here (as an example) and elsewhere.  President Obama has clearly read none of them.  Instead, by making a political decision to punt on the Keystone oil pipeline he's cost 20,000 construction jobs and as much as a million energy jobs.  That's a grave and unneeded unintended consequence.

But there's more.  Lots more.

Jobs: What Obama COULD do without Congress

The president plans to run against a do nothing Congress for not supporting his jobs bill (aka stimulus 2).  He put out a ludicrous and 'unbreakable' bill that he knew the GOP wouldn't approve (for that matter Senate Democrats stalled on it too).  The second phase of his re-election plan was to say, okay we'll break it into smaller pieces and try to pass it that way.  The third phase was to say, "look, we can't wait for Congress, I'm going to see what I can do without them."

Here's a clue Mr. President - Approve the Keystone pipeline project now, not in 2013 (or never) - that's 20,000 jobs right there.

The bluster about him (and only him) being all over the jobs issue is simply hot air.  He's not.  He's all over his re-election effort and the hypocrisy on Keystone proves it.  When supposedly he pivoted to jobs, he was pivoting to his own re-election efforts.  Shameful.  The irony is that by trying to win green voters, he's probably angered union voters in equal or greater numbers.  These were not McJobs, they were skilled labor roles, engineering jobs, construction jobs.  

Nice work Mr. President - wrong on all counts, even your re-election bid.