KEYSTONE XL DELAY – A LESSON LEARNED FOR CANADA TO OVERHAUL ITS THINKING, POLICIES AND TO BE SELF-DEPENDENT

On 18 April the US Administration displayed yet again how pusillanimous and spineless it is on Keystone XL pipeline approval issue by punting it further down the road – any final decision is not expected before the congressional elections this year in November.

The media reports suggest following commentary from both Democrats and Republicans:

New Hampshire Democratic Sen. Heidi Heitkamp blasted the delay, calling it "absolutely ridiculous," while Sen. Mary Landrieu, D-La., called the delay "irresponsible, unnecessary and unacceptable".

From the other side of the aisle, Republican House Speaker John Boehner said “this delay is shameful"; Alaska Sen. Lisa Murkowski, the top Republican on the Senate Energy and Natural Resources Committee, called the delay "a stunning act of political cowardice".

Canada’s Prime Minister Stephen Harper expressed frustration over the snail like pace of the administration’s decision-making. Harper's office was "disappointed that politics continue to delay a decision," his spokesman said. Canadian ambassador Gary Doer reportedly said the State Department should focus on the international crossing between Alberta and Montana and leave it to the state of Nebraska to figure out the precise route there. Incidentally, the U.S. State Department said Friday it needs to assess the impact of a court battle in Nebraska that could force a change in the pipeline’s route.

Notwithstanding whichever way the political circus pans out on Keystone, there is one most important lesson for Canada – it’s federal and provincial politicians, the top corporate executives, the First Nations and the general public: Canada and the Canadians got to diversify, and also be self-dependent. Canada’s policy of putting all eggs in one basket (i.e. depending on US) is past its expiration date. So, what actions should follow from this lessons learned?

·       The pipeline companies in Canada must find alternative pipeline route within Canada to get the bitumen to refineries within Canada and outside;

·       In regard to alternative pipeline routes, conclude negotiations with stakeholders, namely, First Nations, the Provincial Governments ASAP;

·       The Federal and the Provincial governments got to shove aside all politics and come together to make decisions based on win-win formula – a solution that ensures the stakeholders, like, the First Nations, the Province(s) get a reasonably fair deal out of the pipeline projects;

·       The companies in Canada must think about setting up an upgrader within Canada as a complimentary/ supplementary solution, to process the bitumen from Alberta (and potentially from Saskatchewan) and selling the synthetic crude oil (light crude) to US, refineries within Canada (if they have spare capacity to process) and refineries outside Canada;

·       The refinery companies in Canada should think about expanding and/or retro-fitting their refineries in Canada in alignment with production of additional amount of bitumen and/or synthetic crude oil;

·       Align increased gas production from gas fields in BC for use in oil sands production and the refineries and LNG production;

·       Think about putting up petrochemicals complex downstream of Canadian refineries; and

·       Put in place ASAP policy frameworks, tax regimes that are required for decision making on LNG projects and oil sands industry.

Canada may be justified in being utterly frustrated with US on Keystone, but it cannot absolve itself of the pathetically slow progress on pipeline projects within Canada, LNG project in BC and so on. It’s time Canada found solutions toward harnessing its massive natural resources within Canada itself rather than depending on US.

The political parties of Canada – Federal and Provincial both – must understand the basics of Canadian economy (GDP) – the components of the GDP – and must realize the importance of natural resources like oil sands and oil and gas in Canada’s GDP and the service sectors they support. Only then they would realize the futility of having divergent opinion on oil sands and LNG development and squabbling amongst themselves. Only then some political parties would not make irresponsible, ludicrous statements about environmental record of Canada and thereby cause damage to Canadian interests.

The political parties and their leaders must understand clearly that the first world like standard of living and wellbeing of Canada, which Canada is proud of, will be in absolutely serious jeopardy if Canada fails to appreciate the nature’s blessings and harness the nature’s bounty given to it. The delay in Keystone pipeline is nature’s way of warning and providing a wake up call to all Canadians to change its old ways of thinking, policies and working. Now, it is up to the Canadians whether they pay heed to nature’s warning!

KEYSTONE XL PIPELINE AND 2014 CONGRESSIONAL ELECTIONS: OPPORTUNITY FOR OBAMA TO RETRIEVE HIS OWN RELEVANCE FOR DEMOCRATS

Pro-Democrat TV channel MSNBC stated on its website on 10 February 2014 the following:

........Perhaps the top reason why Republicans have a realistic shot at winning back the Senate is the GOP-leaning playing field. They’re taking on Democrats Mark Begich in Alaska, Mark Pryor in Arkansas, Mary Landrieu in Louisiana, and Kay Hagan in North Carolina -- all states President Obama lost in 2012. Not surprisingly, Politico reports that these incumbents don’t want the president to campaign for them this year…..

Mark Begich, Mark Pryor, Mary Landrieu, and Kay Hagan do not want Barack Obama (BO) to campaign for them not because BO lost these states in 2012, but because of BO’s opposition to Keystone XL (KXL) pipeline project. These four senators joined the Canadian Ambassador to US, labor union leaders and others last week to express support for this project. These four senators are completely frustrated with BO’s dithering, foot dragging on this issue and spineless countenance towards the so-called environmentalists opposed to this project.

Heidi Heitkamp (Democrat-ND) is reported to have said: “We have been waiting 5 years. We fought a world war and defeated the Nazis in less time than we have been waiting to have a determination on the Keystone Pipeline..” Such is the frustration of the Democrats. And, rightly so! They know that BO’s genuflection in front of a motley group of fanatical anti-KXL people can very well ruin their chances in 2014 congressional elections.

The most important point that makes any dithering on KXL utterly foolish and un-called for is the US State Department’s report on environmental impact assessment – published in January 2014 – which puts at rest all doubts if this pipeline would “significantly exacerbate climate change”. To start with, it required a huge amount of stupidity to conceive that a pipeline carrying only 830,000 bbl/day of bitumen could “significantly exacerbate climate change”. Moreover, it is widely accepted that Canada has well defined set of regulations in regard to environment protection which makes climate change related doubts appear more foolish or driven by some agenda.

Further, the above cited State Department report also mentioned about the fairly big number of direct and indirect job that would be created by KXL project and the economic benefits that would accrue to US. Not only this, the scare mongering created by anti-KXL group about pipeline leakage has also been addressed by the Report. All in all, there does not seem to be any logical reason to not approve this project.

Now, there is a 90 day period (from the date of publication of report which works out to 1^st week of May 2014) to carry out ‘benefits assessment’ of this project, and then State Department would convey its recommendation to the President after which BO is supposed to give his decision – he may approve, or he may punt it further down the road on some pretext. But whatever decision he makes, it would be before the 2014 congressional elections in which Republicans are hoping to wrest majority in Senate by defeating the four Democrat senators mentioned at the top and gaining couple of other senate seats.

If BO dithers again on KXL and does not approve the project, it would mean a solid nail in the coffin of chances of winning of the said four senators. If Democrats lose Senate (and they already do not have control of House of Representatives), it would mean BO will be virtually relegated to the sidelines in the form of a ‘lame duck’ president for the rest of his presidency. The Republicans would make sure that he does not make headway on any policy issue that he proposes; in short, his political life would become miserable.

Would Obama like to be an outcast within his own party for the rest of his presidential term? Would he like to be portrayed as a pusillanimous person who could not stand up to the agenda-driven so-called environmentalists and scheming, manipulative persons, like, Tom Steyer? BO seems to possess tenacity and stubbornness but stubbornness for a just cause is understandable – stubbornness for something illogical and foolish endangers that very person and his surroundings. Hope BO would let rationality triumph over foolish stubbornness!!