Quebec’s Keystone conundrum

By TALIA BUFORD AND ANDREW RESTUCCIA, POLITICO
October 7, 2013

When it comes to the Keystone XL oil pipeline, there are two Canadas.

In one camp are the die-hard Keystone supporters, including Prime Minister Stephen Harper’s Canadian national government and the province of Alberta, which have launched aggressive lobbying campaigns to secure U.S. approval of the project.

But the province of Quebec stands a bit apart, as it so often does — echoing the concerns of U.S. and Canadian climate activists who fear that development of the Albertan oil sands would cause a disastrous release of greenhouse gases into the atmosphere.

“The greenhouse gas issue is international,” Quebec Environment Minister Yves-Francois Blanchet told POLITICO during a recent visit to Washington, where he gave a keynote address at the International Emissions Trading Association’s Carbon Forum North America. “Alberta and Canada have to do some very, very dramatic efforts to improve their own performance, or not only might there be very serious consequences to the environment in Alberta, but there are consequences for the whole planet.”

Blanchet said that while he believes pipelines are one of the safer modes of transporting oil, he recently met with Albertan officials to encourage them to consider switching to cleaner forms of power. He said Canada would do better to focus on finding less environmentally destructive forms of energy, rather than tapping the oil sands “without taking seriously enough into account the consequences of the environment.”

Quebec gets most of its power from hydroelectricity, he said.

Still, the French-speaking province has reasons for closely watching the debate around Keystone and how Canada develops and transports its bountiful oil supplies.

While Keystone XL would transport Alberta’s oil to refineries in Texas, another proposed project for moving that oil would run through Quebec. That project, called TransCanada Energy East, is one of several pipelines that the Canadian parliament is expected to debate as it considers ways to send the crude to refineries along Canada’s coasts and in the U.S. If Keystone XL is approved, the Quebec line could become moot — TransCanada recently announced it would delay its goal to file the Energy East pipeline application with Canadian officials until 2014.

Energy East has faced pushback from green groups, who say Quebec should look at the greenhouse gas impacts of producing oil sands crude, not just the effects of transporting it.

“One of the most difficult parts of dealing with pipeline issues is keeping the conversation rational,” Blanchet said. “A pipeline is merely a way of transportation for oil, and perhaps the safest way … but we have to know more before making decisions.”

Other ways of transporting crude oil pose their own worries — as shown by a July disaster in which a 72-tanker car train filled with crude oil from North Dakota derailed and exploded in the town of Lac-Mégantic, Quebec. The blast killed an estimated 47 people and devastated the small town.

Trucks and rail have become increasingly common ways to transport Canadian crude oil as the pipeline projects have stalled. The Canadian Railway Association estimates that in 2013, as many as 140,000 carloads of crude will be shipped by rail in Canada, compared with 500 carloads in 2009.

In contrast with the Quebecois’s qualms, many political figures from around Canada are all-in on Keystone.

Harper, for example, has made the case for Keystone directly to President Barack Obama, even sending him a letter proposing stronger efforts to tackle climate change in exchange for U.S. approval of the pipeline. Canadian Natural Resources Minister Joe Oliver and Alberta Premier Alison Redford have made frequent visits to Washington to push U.S. officials and lawmakers to green-light the project.

Christy Clark, the premier of British Columbia, is the latest Canadian official to make a trip to Washington. While she was in town last week to discuss the province’s carbon tax and liquefied natural gas exports, she made sure to stump for Keystone in an interview with POLITICO on Friday.

“In politics rational arguments don’t always succeed,” she said, “but every speck of logic and rational argument is in favor of Keystone. Every single one.”

Clark made the case that it’s possible to be a good steward of the environment and approve new pipeline infrastructure. It’s a message that Canadian officials are stressing more often amid growing concerns that the Obama administration could reject Keystone.

British Columbia is in the process of considering two major pipelines that would carry oil from Allberta: Enbridge’s Northern Gateway and an expansion of KinderMorgan’s Trans Mountain pipeline.

Those companies will have to meet safety and environmental conditions to win approval, British Columbia says. And Clark said the United States should be more explicit about what Keystone developer TransCanada needs to do to win Obama’s blessing.

“My view is, you’ve got to set out a path to get to ‘yes,’” she said. “You can make it a tough path. But you’ve got to set some clear rules that people can live by and try and meet. On Keystone, it appears that there are those that just say, ‘No. How do we get to no?’ And that’s no way to build a country.”

Clark also highlighted British Columbia’s carbon tax as an example of the province’s environmental progress. She said she talked about the benefits of a carbon tax during meetings with several U.S. lawmakers this week.

“American legislators are gobsmacked that our government has been reelected twice after introducing the carbon tax,” Clark said. “It was pretty controversial when it first came in. But in this last election in May, I didn’t get asked about it more than a couple of times because I think people’s concerns about the economic impact weren’t borne out. We continue to be a pretty prosperous place.”

Clark met with House Natural Resources Chairman Doc Hastings (R-Wash.), Sen. Lisa Murkowski (R-Alaska), Rep. Peter DeFazio (D-Ore.) and staff for Senate Energy and Natural Resources Chairman Ron Wyden (D-Ore.). She also met with Kerri-Ann Jones, the assistant secretary for oceans and international environmental and scientific affairs at the State Department.

But Clark said she isn’t optimistic that the U.S. will embrace a carbon tax any time soon.

“I think there are some lawmakers who understand that it would be a good thing to do, but particularly in the midst of the shutdown, I don’t know that there are many that see it as a very real possibility in the future,” she said. “One [member of Congress] said to me, ‘We think there may have been a short window where this was possible at the national level. But it’s gone now.’”

Blanchet agreed.

“In the actual state of things, it has to be state by state,” Blanchet said of carbon tax legislation in the United States.

Quebec has sought to work directly with U.S. states rather than going through the U.S. federal government. Last week, the Quebec government announced that beginning in January, its cap-and-trade program will be linked with California’s, allowing users to exchange credits between the two systems. The province is now hoping to expand the partnership to Northeastern states that are part of the Regional Greenhouse Gas Initiative.

That Quebec favors the local approach should come as no surprise — the province has repeatedly considered seceding from Canada altogether and values its sovereignty.

“I wouldn’t ask the Harper government to protect our environment,” Blanchet said. “At least not to be the only one to do it. We will do it ourselves.”