Monday, November 7, 2011

The XL pipeline is a dog that can't hunt


By Fred Wilson
November 4, 2011
As thousands get ready for a big last push on President Obama against the XL Pipeline in Washington DC this weekend, decision makers should remember Elvis Presley's sage advice: "When things go wrong, don't go with them." If, or when, XL goes down, how many politicians, businessmen and labour leaders will get pulled under with it?

By any measure, TransCanada Pipeline's Keystone XL project has gone horribly wrong. This $7 Billion project was supposed to have been under construction seven months ago. It has yet to receive critical US state approvals, and the once expected pro-forma approval from the White House is now very much in question.

As thousands surround the White House on Nov. 6 to up the pressure on Obama, the Nebraska State legislature is pressing ahead with legislation to force a rerouting of the pipeline around an ecologically sensitive grass lands and the Ogallala aquifer. The Nebraska decision would effectively delay construction by two or more years.

In corporate offices they must be asking how this project has become Canada's hound dog that can't catch a rabbit, and has fewer friends every day. Its hard to have sympathy for TCPL, the pipeline builder, and oil companies like Exxon that want to fill up the pipe with raw bitumen. They rejected all criticism of the development model and estimated that the billions of dollars at play would run over top of the opposition. Instead of addressing the economic and environmental concerns, TCPL hired Hillary Clinton's presidential campaign manager as their chief lobbyist, throwing into question the legitimacy of the US State Department's environmental review.

But as culpable as the industry is, the fundamental responsibility for this mess lies at the door of Steven Harper and the "sympathetic administration" of the oil industry by the National Energy Board of Canada. While the U.S. debate and regulatory process over XL dealt with jobs and environment, neither were given any serious attention by Canada's federal government or the NEB. The development model was flawed from the outset and given approval without due diligence.

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