Trudeau ‘disappointed’ in Obama’s decision to axe Keystone but says link to U.S. larger than one project

Prime Minister says he’s “disappointed” U.S. President rejected TransCanada’s proposed Keystone XL oilsands pipeline, but the decision ratchets up the pressure for to do more to combat climate change with a key international summit just weeks away.

Both the federal Liberal government and Alberta NDP government said the U.S. decision is another reminder that Canada must do a better job balancing environmental protection with energy development if oil and gas projects are to proceed in the future.

The Obama administration’s decision Friday to kill the pipeline project— in part over concerns about “dirtier crude oil” from Canada — marks Trudeau’s first test in office juggling the tricky climate-change file.

It also throws the spotlight on the new Liberal government’s priorities leading into a United Nations climate change summit in Paris at the end of the month.

“We are disappointed by the decision but respect the right of the to make the decision,” Trudeau said in an emailed statement.

“The Canada-U.S. relationship is much bigger than any one project and I look forward to a fresh start with President Obama to strengthen our remarkable ties in a spirit of friendship and co-operation.”

Speaking at the White House, Obama said the Keystone pipeline “would not serve the national interests of the United States” and that the project played an “over-inflated role” in the political discourse between Canada and the U.S.

Obama said his administration rejected the pipeline for multiple reasons, including that it would not make a meaningful long-term contribution to the American economy, and that “shipping dirtier crude oil into our country would not increase America’s energy security.”

We know that Canadians want a government that they can trust to protect the environment and grow the economy

Trudeau has supported the Keystone XL pipeline to get Canadian crude to international markets. However, he had also cautioned that until Canada found a way to effectively price carbon, the Americans would delay and eventually decline the pipeline.

“We know that Canadians want a government that they can trust to protect the environment and grow the economy,” Trudeau said Friday in his statement.

“The Government of Canada will work hand-in-hand with provinces, territories and like-minded countries to combat climate change, adapt to its impacts, and create the clean jobs of tomorrow.”

The project has become a lightning rod over energy security and the environmental impacts of carbon-intensive oilsands production. Canada has become a global environmental pariah over the Alberta oilsands, the third-largest oil reserves on the planet.

AP Photo/Pablo Martinez Monsivais,AP Photo/Pablo Martinez Monsivais,It's bad enough that Obama has been stringing Canadians along over Keystone for years. Even worse that he has been trying to sell Americans on the false notion that the pipeline will only be used to transport Canadian oil to overseas buyers.

A group of environmental protesters gathered outside Rideau Hall on Friday for the second straight day, urging Trudeau to halt oilsands expansion and adopt stronger climate-change policies.

The U.S. decision comes at a sensitive time for the new Liberal government. Trudeau is planning to attend, with Canada’s premiers, the United Nations climate summit in Paris that starts Nov. 30, where global leaders will look to sign an accord for post-2020 climate targets.

The Liberals have also promised they will formally meet the provinces and territories within 90 days “to establish a pan-Canadian framework for combatting climate change.” Trudeau has vowed to put a price on carbon, establish national emissions-reduction targets, and strengthen the environmental review process for energy projects.

Obama spoke with Trudeau Friday.

“While he expressed his disappointment, given Canada’s position on this issue, we both agreed that our close friendship on a whole range of issues – including energy and climate change – should provide the basis for even closer co-ordination between our countries going forward,” Obama said at the White House after meeting with U.S. Secretary of State John Kerry.

The White House’s decision ends, for now, a seven-year saga over a 1,900-kilometre pipeline that would have shipped 800,000 barrels of oilsands crude a day from Alberta to the U.S. Gulf Coast.

The pipeline would run through Montana, South Dakota and Nebraska, and then connect with existing pipelines to carry the oil to refineries along the Texas Gulf Coast.

“This pipeline would neither be a silver bullet for the economy, as was promised by some, nor the express lane to climate disaster proclaimed by others,” Obama said.

In a statement, Kerry took a harsher tone, saying the pipeline “would facilitate the transportation to the United States of one of the dirtiest sources of fuel on the planet.” Kerry said he spoke with Foreign Affairs Minister Stéphane Dion and recognizes the importance of the project to Canada.

Speaking to reporters in Ottawa, Dion noted that Canadian oil needs to get to foreign markets like the U.S., and if not by pipeline, then by other modes of transport that won’t necessarily be as safe or environmentally friendly.

Nevertheless, Dion said he hopes the two countries can start the relationship anew on climate change and the energy challenges facing the continent.

“We see Paris, the conference … as a very key step to go ahead together,” Dion said.

THE CANADIAN PRESS/Sean KilpatrickTHE CANADIAN PRESS/Sean KilpatrickMinister of Foreign Affairs Stephane Dion speaks to the media and Department of Foreign Affairs staff following a cabinet meeting at foreign affairs headquarters in Ottawa on Friday, November 6, 2015.

Canada must strengthen its environmental assessments and have a renewed focus on climate change if energy projects like pipelines are to proceed across the country, he said. The lack of proper environmental oversight has eroded Canada’s ability to create jobs and have a strong economy, he said.

“We need to build a strong confidence around the world about our ability to do our share for a clean environment, including in the matters of energy,” Dion said.
Alberta NDP Premier Rachel Notley delivered a similar message.

She said the Keystone XL decision “underlines the need to improve our environmental record and enhance our reputation” so Alberta and Canada can build the energy infrastructure needed to get the product to new markets.

“We need to be able to have careful, drama-free conversations about the economics of our energy infrastructure, and one of the ways we can help make that happen is for this government to do its part in ensuring that our commitment to combating climate change is real and is understood to be genuine,” she said.

Interim Conservative leader Rona Ambrose said Obama “succumbed to domestic political pressure” by killing Keystone XL.

(AP Photo/Manuel Balce Ceneta)(AP Photo/Manuel Balce Ceneta)Bill McKibben, Fiona McRaith, Leah Qusba and Maayan Cohen join a march from the National Mall to the White House in Washington during a rally on calling on President Barack Obama to reject the Keystone XL oil pipeline from Canada.

Ambrose said she spoke with Trudeau Friday and encouraged him to continue advocating for market access for the energy sector, but also to open talks with the Obama administration as soon as possible.

“It has been clear for some time that – despite the facts, economic benefits and environmental safeguards – the White House’s decision was a fait accompli,” Ambrose said in an emailed statement.

Russ Girling, CEO of Calgary-based TransCanada, said the company is disappointed by Obama’s decision and still believes the pipeline is in the best interests of Canada and the United States.

The project would create thousands of jobs, billions in economic benefits and be safer than transporting oil by rail.

“Today, misplaced symbolism was chosen over merit and science – rhetoric won out over reason,” Girling said in an emailed statement. “Today’s decision deals a damaging blow to jobs, the economy and the environment on both sides of the border.”

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But Simon Dyer, Alberta director at the Pembina Institute, an environmental think-tank, said Obama’s decision should come as no surprise and further reinforces Canada needs to establish federal greenhouse gas regulations for oil and gas development.

He also noted the Liberal party promised during the election campaign to modernize the National Energy Board’s review process, including having upstream carbon emissions included in environmental assessments for energy projects like pipelines.

“Addressing climate impacts is the new normal for major energy infrastructure projects,” Dyer said.

The former Conservative government announced in May new climate change targets that proposed to reduce greenhouse gas emissions 30 per cent below 2005 levels by 2030, but those reductions are well below what many other countries are planning.

The U.S. plan is a bit more aggressive, promising to reduce emissions by up to 28 per cent below 2005 levels by 2025.

Canada, under the Conservatives, largely looked to harmonize emissions standards with the U.S. for some sectors, and both countries pledged to reduce GHG emissions 17 per cent below 2005 levels by 2020.

However, federal data show Canada remains well short of meeting its 2020 climate-change commitments.

About Jason Fekete, Postmedia News