Canada writes U.S. to plug Keystone XL, offer to work together on oil pollution

WASHINGTON – The Canadian government is expressing a desire to work with the United States on reducing oil and gas pollution in a letter to the Obama administration that calls for approval of the Keystone XL pipeline.

The letter argues the merits of the pipeline on environmental, economic and energy-security grounds — and it suggests a willingness, without offering specifics, to take additional steps to curb greenhouse-gas emissions.

The three-page note from Canada’s ambassador to Washington, Gary Doer, says the two countries have already worked together on different climate initiatives, including vehicle-emissions standards, and they can do more.

“Our energy and environment officials are currently assessing common energy issues, including potential oil and gas issues, which we could usefully address together,” said the note to Secretary of State John Kerry, dated Feb. 28 and released Tuesday.

Kerry is leading a regulatory review of TransCanada Corp.’s pipeline proposal and is accepting public comments during a 90-day national-interest determination phase, including the letter from the Canadian government.

Just last month, President Barack Obama revealed that he and Prime Minister Stephen Harper talked at a North American leaders’ summit about new initiatives to curb greenhouse-gas emissions.

While the prime minister has expressed a willingness to work on new initiatives with the U.S., the readout of the 30-minute meeting last month provided by Harper’s office made no mention of that conversation.

A presidential decision on Keystone could be coming soon. The president apparently told state governors at a recent meeting that he expects to make the final call in the next couple of months.

The long-delayed process has already seen five letters submitted by the Canadian government in public comments at different regulatory steps, not to mention a lobby effort that has included multiple trips to Washington by Canadian politicians and a multimillion-dollar advertising effort.

The most recent letter from Doer draws heavily from the State Department’s latest environmental assessment that suggests transporting oil without a pipeline creates between 28 and 42 per cent more greenhouse gases.

The State Department review also concludes that, under foreseeable market conditions, the Alberta oilsands will continue to be developed with or without the Keystone XL network.

The letter from Doer points out that, unlike other countries that export crude to U.S. refineries on the Gulf Coast, Canada has actually committed to reducing greenhouse-gas emissions and has managed to achieve some reductions since 2005.

The letter was released the same day that TransCanada (TSX:TRP) rival Enbridge Inc. (TSX:ENB) announced plans to nearly double the capacity of an existing 390,000-barrel-a-day line to Wisconsin. The Calgary-based company believes it won’t need a presidential permit, allowing it to avoid the regulatory hurdles that have tripped up Keystone XL.

In response to questions about the letter, the federal government said Tuesday that the countries’ natural-resource ministers are discussing a partnership to strengthen energy security, improve environmental protection and generate new economic benefits.

It also pointed to a statement following last month’s Three Amigos summit, saying North America’s natural resource ministers would meet later this year to discuss energy efficiency, infrastructure, innovation, renewable energy, unconventional energy sources, energy trade, and responsible resource development.

Colour environmentalists skeptical — not only of Canada’s past record in fighting climate change, but also of its plans to do anything in the future.

“It doesn’t mean anything,” John Bennett of the Sierra Club said of the promises from the Canadian government.

“Emissions have to be capped.”

If the talk from Ottawa and Washington is about voluntary measures and improvements in carbon-capture technology, he added, that’s all it will be — just talk.

With the U.S. Congress having blocked a cap-and-trade plan, Bennett said he hopes Obama uses his executive power to impose broad limits on carbon emissions. The Obama administration has announced executive measures for new coal-fired power plants and is working on other ones for existing coal plants.

As for Canada, he said, even the limited results in reducing emissions so far have been due mainly to the manufacturing slump of the last decade, and the closing of coal-fired power plants — neither of which the Harper government would take credit for.