OTTAWA - U.S. President Barack Obama's rejection of the Keystone XL pipeline illustrates vividly why Canada must confront the challenge of finding a sustainable way to develop the oilsands, Global Affairs Minister Stephane Dion said Friday.
The seven-year Keystone odyssey came to an end with Washington's thumbs-down on a cross-border permit for Calgary-based TransCanada Corp., which hoped to ship up to 830,000 barrels a day of Alberta crude to refineries on the U.S. Gulf Coast through the 1,897-kilometre line.
The new Liberal government in Ottawa, however, is indicating the push for new pipeline capacity is far from over.
The government is disappointed, said Dion, and Prime Minister Justin Trudeau made that point "very clearly" in a phone call Friday with the U.S. president.
"We want to have a fresh start regarding both the issue of environment and climate change, and also our energy challenge as a continent."
Many environmental groups are adamant there can be no more expansion of oilsands production — meaning no new pipelines — if Canada is to play the responsible role in the global fight against climate change that Trudeau has promised.
"I respect their view, but it's not our view," said Dion, his foreign portfolio newly christened as Global Affairs, following a cabinet orientation meeting at department's fortress-like downtown building.
"We didn't say, 'We'll close the shop and then we will not have any pollution.'"
Dion, a former Liberal environment minister and party leader who ran in the 2008 federal election on a dramatic carbon taxation platform, said the latest Liberal platform said nothing about freezing oilsands development.
"We believe in development but it must be sustainable, including for the oilsands," said Dion, before adding a veiled shot at the pro-resource policies of the previous Conservative government.
"It's a challenge but we will do it with the industry, with the province of Alberta, we'll do it all together. We have no choice. We see the result today when we try to avoid the challenge. The challenge will face up anyway."
His comments stand in contrast to those of the U.S. State Department, which flatly asserted Friday that the U.S. couldn't approve Keystone XL while purporting to be a global leader on climate action.
"The decision to approve the proposed project would have been viewed internationally as inconsistent with the broader U.S. transition to less polluting forms of energy," one State Department official said during a background briefing after Obama formally announced the permit rejection.
"It would have undercut the credibility and influence of the United States in urging other countries to put forward ambitious actions and implement efforts to combat climate change."
Obama made the case that Keystone XL's denial won't have an economic impact on the United States nor will it harm U.S. energy security.
Yet officials maintained that "the kind of test of U.S. resolve, as in everything else is seen most clearly, is when decisions come down the pike which are hard ones."
Royal Dutch Shell recently announced it is scrapping its Carmon Creek oilsands project in northwestern Alberta, citing a lack of pipelines to coastal waters as one reason.
When it was pointed out to the State Department that its decision has harder impacts on Canada than the United States, the officials disagreed. "We don't believe that this project denial will affect production."
Dion agreed there are other oil transport options, but those carry their own environmental problems.
Rona Ambrose, the new interim leader of the official Opposition Conservative party, issued a release saying she'd spoken with Trudeau "and encouraged him to continue advocating for market access for the energy sector."
"The rejection of Keystone will not stop Canadian oil exports to the United States," said Ambrose, an Alberta MP and former environment minister. "It simply means we will continue to rely on transportation alternatives like shipping and rail."
New Democrats, however, were cheering Friday.
NDP Leader Tom Mulcair said Obama's rejection sends a strong signal heading into the COP21 international climate policy conference coming up in Paris.
"It has to become part and parcel of our resource development policy in Canada that we add value here in Canada, that we add those jobs here in Canada," said Mulcair.
"We've got to stop this rip-and-ship approach."
TransCanada's proposed Energy East pipeline, which would carry oil from Alberta and Saskatchewan to refineries in New Brunswick, would appear to more closely match the NDP's wish list, although both New Democrats and Liberals have said the project needs a more rigorous environmental assessment and more consultations with Indigenous Peoples and other communities along the 4,600-kilometre route.
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