Keystone is an early warning for Athabasca – by David Olive (Toronto Star – November 29, 2011)

The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion

U.S. President Barack Obama shocked the Calgary oilpatch earlier this month in delaying approval of the proposed Keystone XL pipeline that would carry Athabasca crude oil across the U.S. Great Plains to refineries on the U.S. Gulf Coast. That step has been greeted in some quarters here as an act of hostility toward Canada.

But it’s the opposite. The U.S. did everyone a favour by putting the brakes on this thing. The environmental impact is clear as mud. And the long-term economic viability not only of Keystone but Athabasca itself is by no means assured.

TransCanada, in which I own shares, earned its setback, playing almost perfectly to the widespread distrust of business in these times. The firm asserted, falsely, that Keystone was essential to U.S. energy security; that halting its progress would spark some kind of national U.S. emergency; and that Keystone had been more thoroughly vetted than any project of its kind.

Funny, that’s exactly what BP PLC told Congress and regulators prior to commencing with its ill-fated Deepwater Horizon project. That epic disaster comes readily to mind not so much as among the biggest oil spills in history, but for abject regulatory failure. And for the credulity among guardians of the public interest in believing what businesspeople will say in pursuit of something they desperately want.

TransCanada has lately stopped making CEO Russell Girling available for comment, on the curious assumption that a faceless corporate favour-seeker is somehow more credible than a candid and accessible one.

Apparently no one in Calgary detected the similarity Americans would see between TransCanada and another foreign multibillion-dollar energy giant that so recently brought grief to the U.S., namely BP. I’ve rarely seen a weak hand so badly overplayed.

And that’s putting aside the almost $1 million TransCanada has spent lobbying Obama’s State Department – big money even in that town. And its hiring of a lobbyist who is a former top campaign worker for Hillary Clinton, who of course heads the state department.

The stink of crony capitalism, one of the Occupy movement’s bigger talking points, was sufficient to require Clinton to call an internal inquiry into her own department for evidence of influence-peddling and conflicts of interest. Rule #1 in corporate diplomacy is to avoid causing public embarrassment for someone from whom you need something.

Think back to Gerry Schwartz’s blundering, failed takeover bid for Air Canada; Ontario Teachers’ Pension Plan Board’s quixotic bid for Bell Canada parent BCE Inc.; and the scheme of dubious merit for merging the Toronto and London stock exchanges. Then multiply by two or three and you have the fiasco of Keystone Kops venture.

The politics. Keystone has attracted an improbable coalition of opponents. It includes cattle ranchers, the Republican governor of Nebraska, Hollywood green celebs, libertarian private-property rights advocates anticipating a Keystone expropriation of grazing and other U.S. lands, and alternative energy proponents.

Obama is not the environmental president the U.S. eco-vote thought it was getting. Obama has always seen the continued use of fossil fuels as a necessary “bridge” to that point, two decades out, when wind, solar and other energy alternatives become practical.

And so Obama has conditionally approved Royal Dutch Shell PLC’s plans for oil fields off the coast of the politically-sensitive Arctic National Wildlife Refuge. In September the president angered not just environmentalists but civic leaders by withdrawing a promised Environmental Protection Agency measure to more vigorously reduce smog. Obama even greenlighted the hated BP’s return to exploration activity in the Gulf of Mexico.

For the rest of this column, please go to the Toronto Star website: http://www.thestar.com/business/article/1092452–keystone-is-an-early-warning-for-athabasca

Comments are closed.