Take that, Canada!

Jan. 12, 2015
Mexican President Enrique Pena Nieto needs a warning about how the US treats friends nowadays. On the day of his chummy, Dec. 6, 2014, meeting with President Barack Obama in Washington, DC, the White House promised Obama would veto legislation approving the Keystone XL pipeline border crossing.

Mexican President Enrique Pena Nieto needs a warning about how the US treats friends nowadays. On the day of his chummy, Dec. 6, 2014, meeting with President Barack Obama in Washington, DC, the White House promised Obama would veto legislation approving the Keystone XL pipeline border crossing. The coincidence received little notice in the US. This probably was not the case in Canada.

Obama and Pena Nieto, according to White House statements, discussed "a range of topics, including immigration, economic growth, security, and Cuba." Timing embellished the diplomatic niceties. "It's appropriate," Obama said, "that our first meeting of the year is with one of our closest allies, neighbors, and friends."

Take that, Canada!

Preemptive veto

Nothing forced the Obama administration to veto Keystone XL legislation preemptively. In the interest of the bipartisan cooperation everyone coos about, it profitably might have waited until legislation promised by Republicans and sure to be passed reached the president's desk. That would have been courteous, at least. But, no, the White House pounced at the first opportunity. "This piece of legislation is not altogether different than legislation that was introduced in the last Congress," responded Press Sec. Josh Earnest when asked in a Jan. 6 press briefing about a Keystone XL bill. "And you'll recall that we put out a statement of administration position indicating that the president would have vetoed had that bill passed the previous Congress. And I can confirm for you that if this bill passes this Congress, the president wouldn't sign it either."

This is an intentional rebuke of Congress. It's a rebuke of the 70% of Americans who support Keystone XL construction. It's a rebuke of voters who recently underscored their disapproval of administration policies by giving Republicans control of the Senate and strengthening their majority in the House. In fact, it's a rebuke of everyone outside the small minority of activists who have stigmatized Keystone XL in a myopic crusade against global warming.

Timing also makes Earnest's comments a horrible rebuke of Canada. As the president blandished "one of our closest allies, neighbors, and friends," his spokesman, who could have told reporters his boss would consider whatever Congress passed and act accordingly, instead reasserted obstructionism that costs another close ally, neighbor, and friend a lot of money. Canada will have to decide whether this represents insensitivity or indifference. Neither choice merits a prize for diplomacy.

The administration can't plead ignorance, which also would be unacceptable. The Department of State issued its final supplemental environmental impact statement (SEIS) a year ago finding that the Keystone XL project would have little effect on emissions of greenhouse gases. With or without the pipeline, Canadian heavy oil will find its way to market, the document argued, asserting the absence of Keystone XL would not lower production of bitumen from the oil sands of Alberta. Inadequacy of pipeline capacity would, however, lower netbacks at the wellhead and mine, mainly because of the needed resort to costlier methods of transportation. "Modeling results indicate that severe pipeline constraints reduce the prices received by bitumen producers by up to $8/bbl but not enough to curtail most oil sands growth plans or to shut in existing production," according to the SEIS.

Imposed cost

That's money not received by producers, shared with governments, and available for salaries and purchases in Canada. It represents cost pushed onto a crucial part of the Canadian economy by American inaction on a pipeline. And the State Department's conclusion that the imposition wouldn't limit oil sands production growth-which was questionable a year ago-assumed crude oil prices much higher than they are today.

Friendship between the US and Mexico is important, of course. A meeting of presidents that promotes it is welcome. But if Pena Nieto ever considers a bilateral effort to, say, increase oil production, he should consult Canadian Prime Minister Stephen Harper before calling the White House.