How Obama Shocked Harper as Keystone's Frustrator-in-Chief; bloomberg.com, Apr 25, 2014; http://www.bloomberg.com/news/2014-04-24/how-obama-shocked-harper-as-keystone-frustrator-in-chief.html; Canada was so blinded by its long-held expectation that the U.S. wanted to buy its oil as much as Canada wanted to sell it that it missed critical cues -- including the hydraulic fracturing revolution that was starting to flood the U.S. with vast new energy supplies -- that Keystone was running into political trouble....This story of Harper’s and Obama’s frayed relations and how Keystone got bogged down was put together after on- and off-the-record interviews with more than 75 people -- current and former Canadian and U.S. government officials; Harper’s political advisers; industry executives; and Nebraska and Alberta politicians involved in the Keystone fray. A number of well-placed Canadian officials in a position to know the inside story asked not to be identified because they aren’t authorized to speak.......... the prime minister was unhappy that depictions of Canada as a “dirty oil” nation were not being adequately confronted by the industry or his ministers. He had become enamored with an argument put forth by conservative commentator Ezra Levant in a book called “Ethical Oil.” It posited that many petro-nations used their oil riches to finance nefarious activities and subjugate their own citizens........ Canada, in the view of Levant, stood practically alone as an ethical producer. In a “mandate letter” setting forth his priorities, Harper instructed Oliver, his new Natural Resources Minister, to become a take-no-prisoners salesman for Canada’s greatest resource....... In informal chats, U.S. officials suggested it would help Obama with his green constituency if Canada would move to regulate emissions from the oil and gas industry. The embassy in Washington, according to an official posted there, constantly relayed messages back home that Canada was being depicted as lax, almost indifferent on the environment. The message would come back that regulations were in the making........ The regulations didn’t surface because Harper and his closest advisers were dubious they mattered. They had come to the conclusion that Obama swallowed concessions whole and gave nothing back. Without an administration commitment to a joint approach, they felt Canada would be digging itself into a competitive hole, according to people familiar with the back-and-forth of the discussions........ Then just like that, or so it seemed in Canada, the emerging energy superpower got stopped in its tracks in Nebraska, America’s 37th-largest state by population and one crisscrossed by pipelines. The Canadians were surprised and stunned by the pushback, said a Canadian diplomat who worked on the file........ In Lincoln, the state capital, Republican Governor Dave Heineman was being lobbied by an unprecedented alliance of environmentalists, farmers and ranchers over a tiny stretch of the project in the Sandhills region.
On Aug. 31, just after the State Department passed its favorable assessment, Governor Heineman wrote Obama and Clinton. “Do not allow TransCanada to build a pipeline over the Ogallala Aquifer and risk the potential damage to Nebraska’s water,” he stated, adding he generally favored pipelines.
Chief Executive Officer Russ Girling said in an interview that the success of the grassroots campaign, employing scare tactics about unrelated matters like BP Plc’s Gulf of Mexico blowout, made TransCanada realize the game had changed for the pipeline industry. “We were caught flat-footed because historically we hadn’t had to deal with that issue on the ground,” he said........ Back in Ottawa Tuesday, a frustrated and determined Harper gathered with his senior ministers in the cabinet room on the third floor of the main Parliament building. The level of urgency and import had rarely if ever felt higher, participants recalled........ Harper opened by describing a world in which Europe’s economy was in shambles yet it preferred to talk about matters like climate change. The U.S. had shown itself prepared to sacrifice energy security and job creation to curry environmental favor. Only Asia, he said, treated economic growth seriously........ Canadian oil producers have come up with new ways of moving bitumen to market, notably by rail. The method generates greater emissions than pipelines and so presents a dilemma for environmentalists who argue Keystone is a climate-change issue....... Yet analysts say Canada has made its share of questionable judgments, too, most obviously its original misreading of Nebraska but also allowing itself to become stigmatized as an environmental laggard. John Kirton, a director of the G8 and G20 Research Groups at the University of Toronto who is writing a book on climate-change politics, said Harper has always taken a hesitant stand on climate change issues in domestic politics and at international summits, failing to build bridges and leaving Obama little to work with........ The Canadian government also failed to appreciate how the explosive growth of shale gas and oil produced by fracking has changed the rules of U.S. energy politics. Canada was still playing the classic energy security card at a time when import pressure was subsiding under a green president........ “If there’s a lesson in this,” said Preston Manning, Harper’s party leader when he first entered Parliament, “it’s that these market opportunities won’t last forever. I think Canadians just took it for granted that the U.S. could take all the oil and gas that Canada could ever produce.” ....... Some see a larger issue for Canada beyond pipelines and oil. “With Obama saying no to Canada or what amounts to a no, the lesson is that we cannot rely anymore on the United States for our economic well-being,” said Allan Gotlieb, former deputy minister of foreign affairs and Ambassador to Washington.......
No Keystone XL? Blame Canada, http://www.bloombergview.com/articles/2014-04-25/no-keystone-xl-blame-canada
Keystone Weirdonomics Means Gas Prices Won’t Be Getting Any Cheaper By Tom Randall Apr 26, 2014 3:40 AM; http://www.bloomberg.com/news/2014-04-25/keystone-weirdonomics-means-gas-prices-won-t-be-getting-any-cheaper-.html; “The Canadian plan was to use their market power to raise prices in the United States (UNG) and get more money from consumers,” Philip Verleger, founder of Colorado-based energy consulting firm PK Verleger LLC, said in an interview. Prices may gain 10 to 20 cents in central states, he said.... A Cornell University study in 2011 had similar findings: KXL will divert Tar Sands oil now supplying Midwest refineries, so it can be sold at higher prices to the Gulf Coast and export markets. As a result, consumers in the Midwest could be paying 10 to 20 cents more per gallon for gasoline and diesel fuel. These additional costs (estimated to total $2–4 billion) will suppress other spending and will therefore cost jobs....
Canada Finds China Option No Easy Answer to Keystone Snub; May 3, 2014 12:01 PM GMT+0800; http://www.bloomberg.com/news/2014-05-02/how-canada-s-flirtation-with-a-china-oil-market-soured.html; .... Harper stood before a business audience in a luxury hotel banquet hall in Guangzhou, capital of China’s most populous province, putting on his best pro-China face while touting his nation’s virtues. “Canada is not just a great trading nation; we are an emerging energy superpower,” he said surrounded by a phalanx of red Chinese and Canadian flags.... Oil was top of mind. He noted that a single country -- the U.S. -- took 99 percent of Canada’s exports, a situation he described as contrary to Canada’s commercial interests. “You know,” he said, “we want to sell our energy to people who want to buy our energy. It’s that simple.”... That Harper now found himself in the People’s Republic hawking Alberta’s oil spoke to the depth of his frustration with Obama. His view, according to people close to Harper who knew his thinking but aren’t authorized to speak, was that sensible Americans would understand the folly of allowing Canada’s massive oil sands reserves, estimated at 168 billion recoverable barrels, to be sucked up by China, a rising economic and political rival. Yet if the Americans – most particularly a president inclined to indulge his green base at Canada’s expense - didn’t pay heed, then Harper had primed the pump to do business with the Chinese....Ultimately, Harper’s cabinet has the final say as to whether the 1,177-kilometer, C$6.5 billion Gateway project is approved. A decision is required by mid June. To kill it could undermine his arguments that Keystone ought to be built, arming anti-Keystone factions with a powerful argument that Canada isn’t willing to practice what it preaches to Obama.... To approve it risks a political and legal brawl. Some green and aboriginal groups are already sounding warnings of massive civil disobedience and lawsuits in British Columbia if Harper says yes. To change the game – with adjustments to the route and revenue sharing, for instance – could conceivably buy peace, at a cost..... “We’re long on rhetoric and short on strategic thinking and planning,” said Wenran Jiang, a University of Alberta China specialist who consults to the Alberta government and energy industry. “You can’t engage the second-largest economy in the world in such a way.” ...Against this principled Harper stood Harper the realist: The oil industry, centered in his home province of Alberta, increasingly recognized it needed new markets for its oil. When first elected prime minister, Harper had firmly embraced an anti-China wing of his party, adopting their belief that China needed Canada and its resources more than Canada needed China, according to advisers familiar with the strategy who asked not to be identified because they are not authorized to speak... This led to an approach often described internally as cold diplomacy with warm economics...
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