As anticipation builds ahead of U.S. President Barack Obama’s looming decision on TransCanada Corp.’s Keystone XL pipeline, even vague pronouncements provoke intense scrutiny. When Obama flagged climate change as a priority during his State of the Union speech in January, overwrought voices interpreted it as a mortal blow to the pipeline’s prospects.
“Yesterday, I talked a little bit about the president’s remarks on climate change,” David Jacobson, the U.S. ambassador to Canada, mused in a recent speech, “and some folks tried to interpret what I had to say as … a veiled threat by the United States that if Canada didn’t do something, we weren’t going to approve Keystone.” Jacobson denied any implied ultimatum.
Still, Keystone XL’s supporters have reason to fret about Obama’s second-term emphasis on climate change. Both the Alberta and federal governments have so far failed to deliver effective policies to address greenhouse-gas emissions. Previously just a hindrance to Canada’s international prestige, that failure is now inhibiting the oilsands industry’s growth.
In 2008, Premier Ed Stelmach committed Alberta to reducing emissions by 50 megatonnes (Mt) a year by 2020. This target was to be reached largely through carbon capture and storage (CCS), a technology that involves capturing industrial CO2 emissions and pumping them into underground geological formations. In a letter published in USA Today in February, his successor, Alison Redford, claimed Alberta had already reduced emissions by 32 Mt over six years, or about 5 Mt a year.
Redford neglected to measure that result against its much more ambitious target. Challenged on that point in the province’s legislature, deputy environment minister Dana Woodworth was forthright: “As of today, we are not on the right trajectory to meet that commitment.” The Pembina Institute, an NGO, estimates Alberta will achieve just one-third of its target, in part because large emitters balked at implementing CCS. The second of four CCS projects to receive government funding commitments shut down in March, still unable to justify the expense.
Ottawa’s own trajectory is also short of the mark. As a signatory to the Copenhagen Accord, in 2010 Canada declared it would reduce emissions 17% from 2005 levels by 2020. “Canada is currently on track to achieve just under half of the emission reductions required to meet its 2020 target,” a report from the National Round Table on the Environment and the Economy concluded last year. “More will have to be done.”
Canada’s dismal performance may not prove fatal to Keystone XL. Two recent studies from the U.S. State Department concluded the pipeline’s impact on the climate will be neutral. Yet Canada’s policy inertia has already taken a costly toll in the form of the discount on pipeline-constrained Albertan oil, says the Pembina Institute’s Simon Dyer. “The issue is not whether Alberta can afford to implement rigorous climate policy,” he says. “It becomes whether Alberta can afford not to.”