Will Washington Keep Blocking Keystone?


The World Energy Council has ranked Canada as number six in green energy credentials and environmental performance, nine places ahead of the United States. At the same time, environmentalist lobbies in the U.S. have stepped up pressure on the Administration in Washington to continue blocking any approval for the Keystone XL pipeline, even if Canada were to improve still further its regulations on carbon emissions.

State Department approval is required because the pipeline crosses an international border. The Environmental Protection Agency has twice publicly excoriated the State Department’s environmental review since TransCanada Corp. (NYSE:TRP) applied for a permit to build Keystone XL five years ago.

Canada is frequently criticized for poor energy regulatory controls, high per capita energy consumption (despite the need to stay warm during long, cold winters), and oil sands development. However, the WEC rankings show that the country outperforms not only the U.S. but also other resource-based economies such as Norway, Australia, and Saudi Arabia.

Over 3,000 organizations in 90 countries are WEC members, spanning the universe of energy-related stakeholders from governments to private and state corporations as well as NGOs and academic institutions. With an institutional history going back to the 1920s, the WEC is a principal network of objective energy-related study and dialogue. It has been publishing its comparative assessments of country-specific energy and climate policies for a number of years.

The WEC’s “Energy Sustainability Index” utilizes 60 databases to construct 23 indicators covering energy security, social equity, and environmental impact mitigation. This is the index that places Canada as number six in energy sustainability, behind Switzerland, Denmark, Sweden, Austria, and the United Kingdom. Even on the environmental impact mitigation dimension alone, Canada outperforms the United States.

Against this backdrop, the leaders of environmental lobbies in the U.S. continue to press the government in Washington not to render a decision in favor of the five-years-delayed Keystone XL pipeline. “Building Keystone XL will expand production in the tarsands,” they wrote in an open letter this week, “and that reality is not compatible with serious efforts to battle climate change.” Polls in the U.S. show have long shown public opinion in favor of the the pipeline.

In August, President Obama himself declared that, “There is no doubt that Canada, at the source in those tarsands, could potentially be doing more to mitigate carbon release.” In fact, an impartial Environment Canada study suggests that tarsands may produce less than one fifth of one per cent of all global greenhouse gas emissions.

At present, the U.S. continues to import oil from the Middle East, Nigeria, and Russia on tankers whose engines need to burn enormous amounts of oil themselves to reach American ports. Many current methodologies exclude the energy spent for transport from calculations of carbon footprints.

Originally written for OilPrice.com, a website that focuses on news and analysis on topics of alternative energy, geopolitics, and oil and gas. OilPrice.com is written for an educated audience that includes investors, fund managers, resource bankers, traders, and energy market professionals around the world.

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