- Biden is committed to establishing better American environmental policies. There is a scientific consensus on the problems of carbon-based energy for the environment, particularly but not exclusively with regard to climate change.
- I don't think we should see this as a shallow commitment, but if we did -- even if you argued that Biden's commitment to the environment is cynical politics -- you'd still have to ask why his made this decision. The answer is that his voters at best lukewarm to Keystone XL and at most in opposition to it. Said differently, a different government if it were behaving cynically, might talk the talk but ignore Keystone. Biden can't because his supporters won't. They want him to take action and so he will take it.
- Taking action is made easier because the US is awash in energy. Back in the 1980s, when Canada and the US were negotiating free trade, a key goal of the American negotiators was to secure access to Canadian energy. There could be all sorts of reasons for this but the key reason is that the American government was concerned about the state of American energy reserves and with the "oil shock" and the Iranian revolution still fresh on American minds, making sure that the US had easy access to Canadian energy was particularly important. Hence, the proportionality clause which, in effect, forces Canada to sell oil to the US. How different things now are. A series of changes means that the US has less need of Canadian energy than at any time since, say, the 1980s. The factors include:
- Green energy will continue to develop as a viable alternative to carbon energy.
- The US reversed policy under Trump and brought back older forms of carbon-based energy production (coal) that are in competition with oil.
- Other countries have pushed production of oil to new levels. Increased political stability in countries like Iraq, Syria, and Libya will likely see continued advances in production. Despite cut production cut backs by some countries in order to try to maintain higher energy prices, there will likely continue to be increases in energy supply.
- The US has increased its own supply thanks to widespread fracking in Montana, the Dakotas, and Oklahoma.
- There are some short term measure that can be included as well. Covid-19 has depressed all sorts of travel lessening the demand for oil and thus lowering prices and need.
- A wild card is the American commitment to cleaner energy. I don't know how significant this factor is, although I suspect it much more significant among Democrats who voted for Biden than Republicans. If American are taking steps to use less energy as part of their personal commitment to the environment, that will have an effect as well.
- I suspect American oil companies are not sad to have less competition from Canadian oil. While the oil (bitumen) moved through Keystone may never have been for American domestic consumption (which raises another issue), why would American energy producers elect to negatively effect their own bottom lines by encouraging the US government to facilitate the shipment of Canadian oil to the US? Does it not make more sense that they would, at the least, say nothing and at most actually encourage Keystone's cancelation?
- There are shockingly limited spinoff effects in the US for Keystone. The jobs that were to be created by it were largely in construction. Once the pipeline is up and running, the number of permanent jobs it creates in the US is limited. There is, thus, no groundswell of "Keystone will get us jobs" in the US because ... people know it is not true.
- There are other issues that the Biden administration also wants to address that are tied up with Keystone, not the least of which is relate to the Standing Rock protests and the opposition of American Indigenous peoples to the pipeline. Going forward with Keystone would have forced the Biden government into on-going confrontations with Indigenous peoples and their allies and likely ended costing millions of dollars in legal fees as battles waged in the courts.
When one puts this all together and what is evident is that Keystone was dead anyway. It was only the Trump administration's ideological commitment that kept it alive. Canadian oil is also expensive, compared to its alternatives. The Canadian oil patch had begun to experience series problems several years ago that date back to the time of the previous NDP government in Alberta and stand at the root of Alberta's pipeline conflicts with BC and Canadian First Nations. What is interesting, of course, is that Kenney's response to the concerns in BC were basically similar to what he is suggesting now. BC, the UPC and even members of the NDP argued, should be forced to let Alberta transport oil over its territory. Now what we have is the Premier of Alberta saying that Canada should find a way to force the US to accept Canadian oil that it does not want, does not need, creates internal conflicts in the US, and stands in the way of other domestic policy initiatives. What would we, as Canadians, think if the US adopted this approach to Canada?
This is the point where I say "I get it" and ... I do. I understand and sympathize with people wanting jobs and good jobs. The problem with the approach taken by Kenney is that it can't provide precisely the thing he is promising. The carbon economy is past its best before date. That does not mean that there will not be energy production and that Canadians won't drill for oil. What it means is that we need to think about what the next stage for the Alberta economy is and begin to work on that. Biden's rejection of Keystone XL was not an attack on Canada. It was a policy decision overdetermined by a broad range of factors and it is unlikely that that broad range of factors will change in even the medium term. Rather than trying to find a way to revive a dead project and a flagging economic sector, we need to find ways to promote alternative economies.
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