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Americans largely missed the Northern Gateway near-reject: Erica Alini

But there are consequences

All quiet on the southern front. Last Friday the B.C. government turned down Enbridge’s Northern Gateway project in a 99-page statement to the federal Joint Review Panel citing some of the same environmental concerns U.S. green activists have been warning about on Keystone XL. Yet, there was barely a mention of it in the mainstream media.

The New York Times, which recently devoted a Saturday front-page spot to an article about oilsand by-products stored along the Detroit River, squeezed a quick mention of the Northern Gateway reject on page three. The Washington Post sandwiched a couple of paragraphs on the pipeline between a story on unemployment and one on Starbucks. The Wall Street Journal ran a 200-word blurb. And that was that.

You can thank the White House for this remarkable lack of what would likely have been unfavourable coverage for the Keystone XL, the pipeline project slated to connect Alberta’s oilsands to U.S. refineries on the Gulf of Mexico. The Obama administration has been struggling to put out three major political fires—which have just yesterday morphed into four. With so much upheaval in Washington, the issue of whether or not to approve Keystone seems to have slipped off the media’s radar.

This happened despite earnest efforts by environmentalist groups to draw attention to the issue. California billionaire and green activist Tom Steyer, for example, quickly sent out an open letter, published by the Washington Post and Politico. The first line reads:

With Friday’s announcement that the Canadian provincial government of British Columbia opposes the transportation of tar sands oil over their lands, the last of the arguments for the development of the Keystone Pipeline has collapsed.

It was a pointed reference to a finding by the State Department that the development of the oilsands does not hinge on the approval of the Keystone because Alberta’s heavy oil can be transported to the coast by other means, including the Northern Gateway. The letter, however, failed to cause the stir witnessed earlier this year, when the San Francisco magnate, who is a generous Democratic donor, threatened dire financial consequences for the party members who support Keystone. The American public, in short, largely missed the news on the Northern Gateway, which might buy Canada some time as, say, Enbridge works out a revised application with stronger environmental guarantees and Ottawa or industry thinks up a financial package that might sweeten the deal for B.C. economically as well.

Now, the U.S. government, of course, did not miss the news. B.C.’s environmental concerns are bound to raise questions about TransCanada’s anti-spill assurances. Even if the State Department, which is working toward a final version of its environmental impact statement on the pipeline, decides it is satisfied with the guarantees provided so far, the U.S. Environmental Protection Agency (EPA) is unlikely to let this go. EPA has already flagged concerns about spills in a formal critique of the State Department’s environmental assessment it filed in April. Any disagreement among government agencies on the issue would put the decision squarely in the hands of President Obama.

B.C.’s move is also likely to draw greater attention to the findings of a Congressionally mandated study on whether diluted oilsands crude, known as dilbit, poses a higher risk of spills than conventional oil (more on that here). The so-called Dilbit Committee is due to present its findings later this summer, likely before a final White House decision on Keystone, which is expected for late August or September.

Erica Alini is a California-based reporter and a regular contributor to CanadianBusiness.com, where she covers the U.S. economy. Follow her on Twitter: @ealini.