Keystone Supporters, Foes See Obama’s Support in Address
“On a scale of one to 10, this was an 11,” said Daniel Kessler, a spokesman for 350.org, which advocates for action to address climate change.
Supporters of the project also were heartened.
“TransCanada is pleased with the president’s guidance,” said Shawn Howard, a spokesman for TransCanada Corp. (TRP), the Calgary-based company that wants to build the $5.3 billion line linking Canadian oil sands with Gulf of Mexico refineries.
If dueling camps found divergent meaning in Obama’s declaration yesterday that he wouldn’t approve the pipeline if it would “significantly exacerbate the problem of carbon pollution,” the market, too, seemed confused. TransCanada shares slid 2.5 percent in Toronto trading, to a seven-month low C$44.62 ($42.41), as Obama was outlining his plans. The shares partially rebounded at the end of trading to C$45.20, up 0.8 percent from the previous day’s close.
With the U.S. State Department months away from a decision on the border-traversing pipeline, the president has inserted Keystone into a broader debate over what he calls a central global challenge of the 21st Century. Contending that science had put to rest any question about global warming --“We don’t have time for a meeting of the Flat Earth Society,” he said in his speech at Georgetown University -- Obama vowed to use his executive powers to act.
“Allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation’s interest,” Obama said. “And our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution. The net effects of the pipeline’s impact on our climate will be absolutely critical to determining whether this project is allowed to go forward.”
In a draft environmental analysis of the project, the State Department said Keystone wouldn’t worsen the risks of climate change because Alberta’s oil sands would be developed even if the project didn’t go forward -- a conclusion that TransCanada cited in its response.
Critics of the pipeline said that the Environmental Protection Agency later faulted the State Department finding and asked for a fuller examination of how Keystone would affect development of the oil sands in its final environmental review.
Obama’s “statement was what we’ve been waiting for,” Michael Brune, executive director of the Sierra Club, a San Francisco-based environmental advocacy group, said in an interview. “He laid out a clear line.”
The project’s sponsor found as much cause for optimism in the president’s inclusion of Keystone in the climate debate.
Obama “clarified that the net effects of the pipeline’s impact on our climate will be critical to determining whether this project is allowed to go forward,” Howard, the company’s spokesman, said in a statement. “TransCanada is pleased with the president’s guidance to the State Department, as the almost five-year review of the project has already repeatedly found that these criteria are satisfied.”
Canadian Ambassador Gary Doer said at a Bloomberg Government breakfast in Washington earlier this month that rejecting the pipeline would actually increase emissions because the oil would have to be transported by train and truck rather than more efficiently by pipeline.
Obama’s comments on Keystone XL were “neutral” for the project because the State Department already has examined the pipeline’s carbon impact, Juan Plessis, an analyst at Canaccord Genuity Corp. in Vancouver, said in a phone interview.
“It’s politics,” said Plessis. “He didn’t say ‘no,’ he didn’t say ‘yes,’ he just said the State Department is evaluating it.” Plessis added: “I didn’t see anything that led me to believe he’s not going to approve it or that he’s changing his mind on it.”
Robert Kwan, an analyst at RBC Capital Markets in Vancouver, said that Obama’s comments did little to change “our 75 percent probability” that the pipeline will receive its presidential permit year’s end. In his note, Kwan cited a State Department analysis that put the project’s greenhouse-gas emissions at 3.19 million metric tons a year, or the equivalent of the electricity consumed by about 398,000 homes in one year.
“It is our opinion that the electricity consumption of 398,000 households is not an amount of carbon emissions that would ‘significantly exacerbate’ carbon pollution,” Kwan said.
John Northington, a Washington-based oil and gas consultant and former Energy Department official under President Bill Clinton, said in an interview that he didn’t think Obama’s Keystone remarks would change the direction the State Department is taking in reviewing the pipeline.
“People hear what they want to hear,” Northington said.
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