|September 13, 2013|
What can Canada do to get Keystone approved?
|Canadian leaders are signaling their desire for a deal that could win U.S. approval of the Keystone XL pipeline in return for limiting the climate impacts of the northern nation's oil sands production.|
But what specific steps could Canada offer? Analysts see several possibilities, including requirements for advanced carbon capture technology and new greenhouse gas limits on the Canadian oil and gas sector.
Some experts say the Canadians are so motivated to see the oil pipeline approved that the U.S. has significant leverage to win concessions that would help deal with climate change.
Approving Keystone would result in a "huge windfall for Canada, for Alberta and the oil companies," said Paul Bledsoe, a senior fellow on energy and climate at the German Marshall Fund and a former Clinton White House aide. "And it's not unreasonable, it seems to me, for the United States to bargain very hard to push them to use a small part of that windfall to develop broadly applicable technologies to deal with climate change."
Climate activists counter that nothing Canada does would make up for the enormous amounts of carbon dioxide that would be unleashed if Keystone is built. They say the Canadian government is already lagging on fulfilling its existing environmental promises.
Still, Canadian officials appear increasingly willing to work with the United States in an effort to secure a Keystone approval. Natural Resources Minister Joe Oliver told reporters Monday that his government is willing to take new steps to make oil sands production less climate-intensive, and Prime Minister Stephen Harper wrote to President Barack Obama last month proposing joint action to reduce greenhouse gas emissions in the oil sector.
While neither Oliver nor Harper has gone public with details, Canada's options could include offering incentives for companies to capture and store the emissions that power plants generate during the energy-intensive oil sands development process.
"As oil sands production increases, they're going to need more electric power to produce the sands," Bledsoe said. "Canada could get together with major corporations who are already looking at this and initiate the building of several groundbreaking power plants with this technology. That's the kind of breakthrough we're going to need to really lower emissions."
Any agreement between the U.S. and Canada has to be broadly applicable and can't focus just on the oil sands, Bledsoe argued.
"The investments can't just be about producing more oil sands," he said. "What does that get for the environmental community or ultimately the environment? The reductions have to have broader applications."
Advanced carbon capture and storage technology, Bledsoe said, could be used at power plants across Canada and the United States, a development that would "have long-term value on climate change." The technology has been slow to reach commercialization, but it may become essential if many U.S. coal-fired power plants are to continue operating under the Obama administration's pending climate change regulations.
Canadian officials have often pointed to Shell's Quest CCS project, which the company says would capture more than a million tons of carbon dioxide per year from its oil sands operations in Alberta. The project is still under development, and Shell says storage of carbon dioxide at the site won't begin until around 2015.
Other steps Canada could take include imposing tighter emissions reduction goals, issuing new greenhouse gas regulations on the oil and gas sector or setting goals to increase energy efficiency, according to those following the issue. One observer envisioned a scenario in which Obama approves the pipeline and simultaneously outlines a join U.S.-Canada proposal to tackle emissions from oil sands production over a specified timeline.
Such a move would allow the president some political cover following his June declaration that the U.S. should approve the pipeline only if it "does not significantly exacerbate the problem of carbon pollution."
"It would probably garner a lot of capital in Washington if the Canadian government said, 'Yes, we know there are some issues with the oil sands ... and we're going to take concrete steps to address them,'" said Nik Nanos, a public policy scholar at the Woodrow Wilson Center.
Nanos, in a paper published late last month, found based on polling that significant support exists in Canada and the United States for Keystone, "but the positive impression scores are lower than support for approval." In other words, the paper says, "The public does not necessarily embrace the project but believes it should be approved."
Nanos added that the U.S.-Canada energy relationship needs to be about more than just Keystone.
"One of the political traps that Canada has fallen into right now is that Keystone has ... become the signature energy project that is defining the Canada-U.S. energy relationship," Nanos said. "I think it's in the best interest of Canada and the United States to have a broader discussion, rather than just being a referendum on the Keystone pipeline."
But environmental groups opposed to Keystone say the U.S. shouldn't trust Canada to take meaningful steps to reduce the environmental impact of oil sands development.
"This is clearly a last-ditch attempt to convince the U.S. to take our tar sands oil," said Gillian McEachern, campaigns director at the Canadian environmental group Environmental Defence. "And it's because the oil industry and our government is becoming increasingly desperate because no matter what way they try to build these pipelines, they face opposition."
Canadian officials have long promised to take new measures to tackle climate change, including by imposing oil-sector-specific standards. But McEachern said those standards are long delayed. And she added, "In cases where the government has acted to put in place relatively lenient rules, we see the industry ignoring them."
"Canada could promise the moon in exchange for a pipeline approval and then deliver nothing," she said.
The most effective way to mitigate the climate impact of the oil sands is by capping production, said Danielle Droitsch, Canada Project director at the Natural Resources Defense Council. But she noted that such a move is not under discussion.
"You cannot simultaneously expand this incredibly carbon-intensive sector and then turn around and promise the American government, 'Oh yes, we're going to address these problems, trust us,'" she said. "The quid pro quo doesn't make any sense."
It's possible to lower the carbon intensity of oil sands production through carbon capture and storage. But the Canadian government would need to put in place significant climate change policies to drive the adoption and development of the technology.
"What's being actively discussed by industry, and government still falls well short of what is needed," Droitsch said.