“Our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution.” Thus spoke Barack Obama on Canada’s Keystone XL pipeline in a major climate change speech last month. The statement was open to interpretation. Some took it as a warning that the pipeline was doomed. Others, including myself, argued the president had left himself some wiggle room to make up his mind later.
As of last weekend, we have more comments with which to dissect that enigmatic sentence, as the president discussed Keystone in the context of a broader interview with the New York Times released on Saturday. This time, most commentators on both sides of the border concluded the White House truly is leaning against the pipeline. But it seems to me that there’s still hope.
Yes, the president said “tar sands.” And yes, he dismissed claims that Keystone will have any significant impact on U.S. employment. Obama said the pipeline might add “maybe 2,000 jobs” during the construction phase. Admittedly, those numbers are at the lower end of most estimates, and they don’t take into account jobs created indirectly — say, by the local store that hires more staff to cope with a surge of demand from the temporary workers who’ve come to town to build the pipeline. Fine. But Keystone supporters have tossed around some grossly inflated job numbers and it’s no surprise the president took issue with them.
Obama also said Keystone “does not bring down gas prices here in the United States.” “In fact,” he added, “it might actually cause some gas prices in the Midwest to go up.” The first statement is correct: One pipeline won’t affect oil prices, and oil sands exports in general would put at best a very small dent in U.S. gasoline prices. The president’s second statement on the issue reflects recent claims by pipeline opponents that appear to be factually incorrect, as University of Alberta’s Andrew Leach explains here. Still, gasoline prices aren’t the strongest argument in favour of the Keystone.
Besides, the president quickly moved on: “Now, having said that, there is a potential benefit for us integrating further with a reliable ally to the north our energy supplies.” Now, this is the main reason for Uncle Sam to want Canada’s pipeline. Ottawa and Edmonton have long been trumpeting the desirability of an integrated North American energy market. And the White House, it seems, has been listening.
The last thing Obama said about the Keystone was:
I meant what I said; I’m going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere. And there is no doubt that Canada at the source in those tar sands could potentially be doing more to mitigate carbon release.
This to me sounds like the president embracing the megaphone and shouting over to Ottawa: “I need more from you guys on carbon offsets to be able to approve this thing.” It’s the same message he was likely trying to send last month, during that big climate speech.
Of course, I could be wrong. The Obama Administration has fully embraced the shale revolution, and always stood behind nuclear power. It could very well be that Keystone has been designed as a bone to be thrown to the president’s green allies, along with the U.S. coal industry, to compensate for that.
Still, if I were Ottawa, I’d hasten to come up with some really ambitious ideas about carbon offsets.
Erica Alini is a California-based reporter and a regular contributor to CanadianBusiness.com, where she covers the U.S. economy.