U.S. envoy tempers Tory optimism on Keystone XL as Obama win stokes hope

OTTAWA – The Harper government shouldn’t be getting its hopes up that Barack Obama’s re-election will mean speedy approval of the controversial Keystone XL pipeline, says the U.S. ambassador to Canada.

U.S. envoy David Jacobson’s assessment provides a sobering counterpoint to the optimism expressed by the government Wednesday that the Keystone XL pipeline can proceed now that the American campaign is over.

“I’m not going to pre-empt the president’s decision,” Jacobson told The Canadian Press in an interview this week on the eve of Obama’s victory over Republican challenger Mitt Romney.

“We don’t even have a route yet from the state of Nebraska, and until we have that, nothing can happen,” he said.

“This thing has got to move in an orderly fashion. But I think we need to keep Keystone in the proper context of what is the largest energy relationship between two countries in the world … It is not a huge part of that relationship.”

Romney repeatedly pledged to immediately approve “the pipeline from Canada” throughout the presidential campaign.

Obama delayed approval of the project until next year — after Tuesday’s presidential election — after environmental groups put enormous pressure on his government.

The TransCanada pipeline, which would carry bitumen from the Alberta oilsands to U.S. refineries in the Gulf of Mexico, has faced pressure from environmental regulators in Nebraska.

The Obama administration denied Keystone’s bid in January because of concerns about the proposed pipeline route over the Ogallala aquifer, a major fresh water source. TransCanada has since unveiled a new pipeline route around the area.

Natural Resources Minister Joe Oliver said Wednesday he is confident the newly re-elected Obama administration would see the economic benefits of the pipeline.

“We believe that the XL pipeline will ultimately be approved by the U.S. administration because it’s in America’s national interest. It responds to national security concerns and it will create jobs and economic activity in the United States,” Oliver said.

“It’s good for both countries.”

Prime Minister Stephen Harper was not pleased with Obama’s decision to delay Keystone’s approval, but has said he understands the realities of U.S. presidential politics.

Obama is no longer in the middle of an election so the project can proceed on its merits, Oliver said.

TransCanada said Wednesday that it still believes the project will be approved.

“The facts that support the approval of Keystone XL remain the same — and the need for this pipeline grows even stronger the longer its approval is delayed,” the company said in a statement.

Alberta Premier Alison Redford said she, too, is looking forward to working with Obama and promoting the province’s resources as critical for the U.S. to achieve energy independence and economic security in North America.

Obama didn’t specifically mention the Keystone project in his victory speech early Wednesday. But he pledged to work with both parties towards “freeing ourselves from foreign oil.”

Obama’s re-election is also sparking hope that the issue of climate change — a topic that was largely missing from action during the long presidential campaign — will gain new momentum in his second term.

That has emboldened the very U.S. opponents of the Keystone project whose activism pushed the project to the back burner for further review.

The National Resources Defense Council, the New York-based advocacy group that has opposed the pipeline, called Oliver’s comments “wishful thinking.”

“Approval of the Keystone XL tar sands pipeline is certainly not a given, especially when a second term for President Barack Obama is going to mean a strong commitment to fighting climate change pollution and promoting clean energy choices,” the council’s Canada program director Danielle Droitsch said in a blog post Wednesday.

“More than ever, Canada’s current approach to energy development — which strongly favours a massive build up of tar sands production — is at odds with America’s path.”

In the interview, Jacobson said “Canada and the United States have exactly the same goals with respect to greenhouse gas emissions.” He said both countries have pledged a 17 per cent reduction in emissions by 2020 and 80 per cent by 2050.

But he said the aftermath of hurricane Sandy means “you don’t have to be a genius to know that something is going on here.”

NDP Leader Tom Mulcair expressed hope Wednesday that Obama’s re-election would lead to progress on a joint Canada-U.S. cap and trade system to help bring down greenhouse gas levels.

“I think that the beginning of this second term really does open up a whole new era,” said Mulcair.

“People who understand the importance of coming to grips with climate change understand that a cap-and-trade system is the only serious way of guaranteeing the result of a reduction of greenhouse gas.”

The Harper government has said it’s only interested in a cap-and-trade system if the U.S. moves in that direction.