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Keystone Decision Seen as Climate Change Test for Obama Abroad

'Any move he makes will be carefully analyzed by the European Union and China to see what it says about his willingness to fight hard on climate change.'

Aug 15, 2013
Connie Hedegaard

The Keystone XL tar sands pipeline has become a top priority for environmental groups and some politicians who oppose the project—and not just in America.

With tensions over the controversial pipeline reaching fever pitch stateside, political activists and leaders abroad are closely watching the developments on the Keystone as a barometer of how willing and able President Obama is to make hard policy choices on global warming, according to an informal InsideClimate News survey.

"Obama's intentions on climate change are under intense international scrutiny," said Nick Mabey, founding director and chief executive of E3G, a London-based environmental organization. "Any move he makes will be carefully analyzed by the European Union and China to see what it says about his willingness to fight hard on climate change issues."

The dozen experts surveyed include climate researchers, advocates, economists, government advisers and politicians who help shape policies to manage climate change in their countries, from Mexico to South Africa to Europe. Most said they oppose the Keystone project, because of global warming concerns. If approved by the Obama administration, the Alberta-to-Texas pipeline would carry up to 830,000 barrels daily of tar sands oil—a type of heavy crude from Canada that uses more energy and releases more greenhouse gases during mining and refining than conventional oil.  

The Keystone is seen as the linchpin in opening a coastal gateway for the flow of heavy tar sands crude from Canada’s landlocked oil patch to the world market—including to Europe, which will soon decide whether to label the fuel as highly polluting, a classification that could restrict its import into the region.

The pipeline would "increase climate risks for us all," said Sir Brian Hoskins, a climatologist and director of the Grantham Institute for Climate Change at Imperial College London. "The world needs to rapidly reduce the carbon intensity of its energy globally if we are collectively to limit the worst risks of climate change."

Most of those surveyed also agreed that Obama's decision would have climate impacts beyond the project's direct and indirect greenhouse gas emissions.

Because the United States holds so much sway in world affairs, the pipeline's approval would send a signal that the world's second-biggest carbon polluter is sticking with business as usual on energy policy, dampening hopes for a meaningful global climate pact anytime soon, they suggested in their responses. Rejection of the project, on the other hand, could embolden their own countries’ efforts to tackle greenhouse gas emissions and also energize stalemated global climate negotiations, they said.

"If you had a U.S. administration that would avoid doing something they could do [because of climate change], that would be a very, very interesting global signal," said Connie Hedegaard, a Danish politician who serves as the European Commissioner for Climate Action. Hedegaard previously told reporters that nixing the pipeline would be "an extremely strong signal" to the world.

The Obama administration is expected to determine whether the Keystone XL is in the "national interest" later this year or early next year. The project is in its fifth year of review.

Gauging Global Opinion

In an effort to survey international climate leaders on the Keystone, InsideClimate News reached out to more than 20 policy and energy experts, leaders of non-profits, scientists and politicians across the globe. A dozen replied from seven countries. They were asked the following questions: Are you paying attention to the debate over the Keystone XL pipeline? From an international perspective, do you see Keystone as a climate issue? Do you think the Obama administration's decision will have an impact on global action on climate change? And will the Obama administration's decision—whichever way it goes—influence your own actions or agenda?

All of the respondents said they have been monitoring the U.S. debate over the Keystone, which for years has pitted the North American fossil fuel industry and its allies against environmental activists and landowners along the route, and has become the focal point of the debate over America’s energy future. Many said they see the project as a test of Obama’s recent commitment to tackle climate change—with implications for global climate action and the president’s image abroad.

"President Obama and Secretary John Kerry are fortunately talking about the seriousness of the [climate] threat," said Jörg Haas, the director for global climate policies at the European Climate Foundation. "This is very welcome and necessary, and a signal of hope that is noticed elsewhere."

Given the carbon footprint of the oil sands, "approving the Keystone XL would certainly undermine the credibility of the Obama administration," Haas said.

In Obama’s first term, the issue of climate change vanished from the political debate. But last fall Hurricane Sandy forced the topic back on the national agenda. And Obama made global warming a key focus of his inaugural address in January.

This June, Obama called climate change "the global threat of our time" during a speech at the Brandenburg Gate in Berlin, as part of an effort to reassert White House leadership on climate after global climate treaty talks and domestic policy went nowhere in recent years. Weeks later, he rolled out his second-term action plan for addressing global warming in a speech at Georgetown University—during which he called on America to "lead international efforts to combat a changing climate."

In the Georgetown speech, Obama also broke his silence on the Keystone.

In a pronouncement that marked a milestone for a U.S. environmental community that has fought for years to frame the pipeline fight in global warming terms, Obama said the Keystone would be decided on its climate impact. "Our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution," he said.

Obama reiterated that point last month to the New York Times.

"I meant what I said [in June]," he told the newspaper in an interview. "I'm going to evaluate this based on whether or not this is going to significantly contribute to carbon in our atmosphere."

Cautiously Optimistic

While recognizing Obama's change of tune on climate change and the Keystone, many of the experts surveyed said they're only cautiously optimistic that his recent statements are anything more than words.

"Obviously Obama's statement [on Keystone] is welcome," said Sam Fankhauser, a climate economist at the London School of Economics and an advisor to the UK government on carbon targets and adaptation. "But it does not mean that the proposal is dead. Far from it."

In the United States, the pipeline decision is still anyone's guess.

In March, the State Department released its controversial draft environmental impact statement of the project, which said a rejection of the pipeline wouldn't result in substantial climate benefits because Canadian producers would continue to ship oil sands products to refineries by other means, such as rail. The Environmental Protection Agency later found "environmental objections" to the department’s review and deemed it "insufficient," in part for underestimating the climate consequences. On a lifecycle basis, the EPA said, the greenhouse gas emissions intensity of the average tar sands import is roughly 17 percent higher than that of the average crude oil consumed in the United States.

The State Department's Inspector General is currently reviewing the draft report for possible conflicts of interest. The allegations, if proven true, could discredit the report's findings.

Echoing the State Department's analysis, Leonardo Maugeri, an energy expert at Harvard University's Geopolitics of Energy Project and a former top development manager for Italian oil giant Eni, said in his survey response that environmentalists should brace themselves for the eventuality that Canada will find another way to export its tar sands oil.

"It will take time, but [Canada] will do it," he said. "As a consequence, Keystone or not, the real problem will remain oil sands development."

In Mexico, meanwhile, environmentalists are concerned about something else—that the influx of Keystone XL oil would displace U.S. imports of Mexican oil, and therefore encourage Mexico's government and industry to hasten development of their own shale oil to stay competitive.

"Keystone is linked to the fate or destiny of Mexico," said Fabio Barbosa, an oil expert at the National Autonomous University of Mexico. "It's a central piece in the new offensive to expand shale drilling here, which would devastate large agricultural zones."

Shawn Howard, a spokesman for the TransCanada, the Alberta-based pipeline operator seeking to build the project, said the Keystone XL is in the U.S. national interest and should be built.

"Regardless of where people live or what their comments are, the real fundamental question that has to be answered is simple: Does the pipeline meet the regulatory standards to operate in the United States and is it in America's national interest?" he said. "Our customers remain firmly committed to [the project] and we continue to believe that Keystone XL is in America's national interest and is an important part of modernizing America's energy infrastructure."

Long Road Ahead

Some of the climate experts surveyed pointed out that it will take far more than a rejection of Keystone to shift international perceptions of U.S. willingness to deal with climate change and inspire actions elsewhere.

Amy Davidsen, U.S. executive director of The Climate Group, an international coalition of organizations, states and public figures who want to lower carbon emissions, said the rejection must be accompanied by a suite of aggressive climate-fighting energy policies.

Many countries, especially in Europe, are far ahead of the United States in managing climate change. Leading the way is Germany, which is undergoing a nearly $730 billion overhaul of its electricity sector from fossil fuels and nuclear to renewable sources and already gets an average 25 percent of its energy from solar, wind and biomass.

"A rejection of the Keystone XL absent more systematic changes would be unlikely to inspire ambitious action elsewhere," Davidsen said. "It will be considered alongside other actions the U.S. takes, or fails to take, in the coming years—including pricing carbon, regulating GHGs using existing authorities, and leveling the competitive playing field between fossil fuels and clean energy."

During his Georgetown speech, Obama proposed a number of executive actions to reduce greenhouse gas pollution, including curbing carbon emissions from existing power plants, fostering rapid development of clean energy sources and encouraging global climate talks. But steps that require Congressional approval, such as a national price on carbon or U.S. participation in a legally binding global climate treaty, would likely be impossible to push through in this Congress. The U.S. House of Representatives has blocked the passage of every climate-related bill in recent years.

In the meantime, climate leaders abroad said they will be watching closely as the Obama administration works to implement its climate initiatives and makes its final Keystone decision.

A rejection of the project would be "a positive surprise, and, as such, may change people's perception of an intransigent U.S. position," Fankhauser, the British climate economist, said.

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