The Oil and the Glory

Will the fate of an oil pipeline help decide the U.S. presidential election?

Could the fate of a pipeline prove decisive in the U.S. presidential election? So far, the proposed Keystone XL pipeline connecting Canada and Texas is central to a Republican strategy of tarring President Obama as an economically clueless tree-hugger oblivious to the jobless multitude. Yet should energy pipelines assume gigantic, life-like proportions in the public ...

Could the fate of a pipeline prove decisive in the U.S. presidential election? So far, the proposed Keystone XL pipeline connecting Canada and Texas is central to a Republican strategy of tarring President Obama as an economically clueless tree-hugger oblivious to the jobless multitude.

Yet should energy pipelines assume gigantic, life-like proportions in the public imagination? Whether or not they should, they have been doing so for a couple of decades now. In the 1990s, the Baku-Ceyhan oil pipeline linking the Caspian and Mediterranean seas was treated by its advocates and opponents as a life-and-death struggle. So it has been in recent years over competing proposed natural gas pipelines connecting Europe to Russia and Central Asia — Nord Stream, South Stream and Nabucco.

Now we have Keystone XL, a proposal by TransCanada for a 1,700-mile-long pipeline that would carry some 700,000 barrels a day of bitumen to Gulf of Mexico refineries.

Yet, while American pols go on and on theatrically about Keystone, it is instructive how calmly the Canadians handle the issue.

In interviews with Canadian officials and analysts who study the matter for a piece on EnergyWire, I was told that Canadians are dismayed that Obama has postponed approval of the line until next year. They don’t like it. But they also are convinced that the line will be approved regardless who wins in November. "They’re perturbed by getting caught in this political minefield in the U.S.," said David Pumphrey of the Center for Strategic and International Studies. "They feel they are a victim of all sorts of things. They are perturbed by being treated this way."

The main lesson for the Canadians is that, when it comes to hydrocarbons, diversity of supply, demand and shipping routes are king. That is why they will probably proceed with a secondary pipeline route to the Canadian West Coast, from which the bitumen can go on to Asia, especially China. Here is David Collyer, president of the Canadian Association of Petroleum Producers:

I wouldn’t say Canadians were complacent about the U.S. market. But what has given them a bit of a wakeup call was that the evidence seemed so compelling why the U.S. should buy more oil from Canada, but yet the decision was delayed. We are not naïve about the politics in the U.S., but when we see such a compelling case, and yet it is not approved, it has given people a start. We need to look at alternatives.

Gary Doer, Canada’s ambassador to the United States, told me that his country has sought the West Coast export lines out of necessity. "We do not stand still," he said.

If Mitt Romney wins in November, he can thank Alberta for its eagerness to share its oil sands with the world.

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