Ambassador: Rejection of Keystone Would 'Definitely Strain' U.S.-Canadian Relations

View of the Syncrude oil sands extraction facility near the town of Fort McMurray in Alberta Province, Canada on October 25, 2009. Greenpeace is calling for an end to oil sands mining in the region due to their greenhouse gas emissions and have recently staged sit-ins which briefly halted production at several mines. At an estimated 175 billion barrels, Alberta's oil sands are the second largest oil reserve in the world behind Saudi Arabia, but they were neglected for years, except by local companies, because of high extraction costs. Since 2000, skyrocketing crude oil prices and improved extraction methods have made exploitation more economical, and have lured several multinational oil companies to mine the sands. (National Journal)

Canada's ambassador to the U.S. isn't sugarcoating the diplomatic weight of the looming White House decision on the Keystone XL pipeline.

Gary Doer told the news service Platts that he's optimistic about winning approval, while warning that rejection would be "perceived as being political" and "definitely strain" U.S.-Canadian relations. He argued that the project has met the various U.S. benchmarks, citing the State Department's environmental analysis released Jan. 31.

"The report basically says that [oil from Alberta's oil sands] either will come down on rail with higher GHGs, and it is now coming down on rail, or it can come down on a pipeline with less GHGs," he told Platts Energy Week TV, using the acronym for greenhouse gases.

"So I guess I would say, based on this report and based on the president's own stated [climate] criteria, that if the project is rejected it would be perceived as being political and not on the basis of the public interest of the United states and Canada," Doer added in the interview that aired Sunday.

Doer and other pipeline backers are pushing hard to capitalize on the State Department report.

But State's analysis is just one factor in play. A Wall Street Journal story on Secretary of State John Kerry's looming permit decision highlights another one.

"One point Mr. Kerry will consider is the importance of the U.S. taking a lead role in addressing climate issues," states the story that ran over the weekend.

Kerry, who has prioritized climate change during his long political career, may be wrestling with whether approval would hurt the U.S. in global climate policy planning.

Consider European Union climate chief Connie Hedegaard's comments a year ago. She said rejecting Keystone would be an "extremely strong signal" on climate from the second-term Obama administration.

So, the Journal piece is a reminder that the fate of Keystone could rest on more than fine-grain analyses of future rail capacity and oil-sands production outlooks.

In other Keystone XL news, The Washington Post reports on the upcoming State Department inspector general report on State's environmental analysis of Keystone.

Environmentalists have alleged that Environmental Resources Management, the consulting firm that State retained to craft the analysis, suffered from conflicts of interest.

"According to individuals familiar with the inspector general's probe, who spoke on the condition of anonymity because the report is not final, a current draft suggests the agency examine its conflict-of-interest process but does not find that State Department officials violated agency rules in retaining ERM," the Post reports.

The analysis in question essentially found that the Keystone pipeline is unlikely to cause a surge in greenhouse-gas emissions (although it includes an alternative modeling scenario that's less sanguine about Keystone's climate footprint).

Environmentalists battling the pipeline kept up their campaign over the weekend.

"The dirtiest oil on the planet comes from those tar sands. We can't let that oil out of the ground. That's what the scientists say. We need to leave a significant amount of our fossil-fuel reserves in the ground if we have any chance of solving the climate crisis," said League of Conservation Voters President Gene Karpinski during a Sunday interview with C-SPAN.