Rather than get even, Canada needs to get smart on Keystone

by Colin Robertson

The Globe and Mail
April 29, 2014

Disappointment, frustration, even anger, are natural reactions to the Obama Administration’s Good Friday decision to delay, again, permitting the Keystone XL pipeline.

It belittles the Administration’s promise of fair and timely process. It’s a rebuke to a loyal ally who is also America’s biggest customer.

Extending the process for more review, even with the Nebraska challenge, rings hollow especially, as TransCanada’s Russ Girling observed, “after more than 2,000 days, five exhaustive environmental reviews and over 17,000 pages of scientific data.”

The more likely reason: the White House calculation about the midterms and the contribution in money and campaign enthusiasm of the environmental movement.

There will be a Canadian temptation to ‘get even.’ Resist it.

The United States accounts for 70 per cent of our trade and more than one third of our economic output.

Even without Keystone, oil is getting to U.S. refineries through existing pipelines and, increasingly, by rail and truck. That pipelines are the safer means of transport is acknowledged in the State Department’s environmental assessment.

Rather than get mad, we need to be smart.

The Obama Administration likely will rag the puck on the permit until after the November elections. Meanwhile, our allies in Congress will continue to push. Most Americans favour the pipeline.

At home, we need to turn our energies to constructing east-west pipelines and terminals so we can get our oil and gas to tidewater.

With U.S. energy production rising, some Americans believe Canadian energy is unnecessary. They are wrong.

The U.S. imports 8-9 million barrels of petroleum daily; one-third from Canada. American reliance on Canadian oil is increasing (in January we supplied more than OPEC). But we need to get it there.

We also pay the penalty inflicted on a captive supplier to a sole market. Dependence on the U.S. market could result in the ‘managed trade’ situation endured on softwood lumber until we opened an alternate market with Asia.

Unlike most presidents, Barack Obama seems not to appreciate the strategic importance to the U.S. of Canada.

Since Franklin Roosevelt and Mackenzie King parleyed at Kingston in 1938, the dynamic of Canada-U.S. relations has revolved around our security and economic partnership.

The U.S. wants a reliable security partner.

We upped our game on security after September 11. We spent billions creating a security perimeter. Our collective security credentials are demonstrated in Afghanistan, Libya and now in the Ukrainian crisis.

In return, we expect a reliable economic partner.

Prime Minister Harper’s border access initiative has made progress but it lacks the sustained senior-level U.S. commitment demonstrated during the ‘Smart Border’ process.

As a teachable moment, Keystone recalls the Carter Administration’s failure to ratify the East Coast Fisheries Agreement in 1978.

The lesson then was the necessity to engage Congress directly.

Under Ambassador Allan Gotlieb, we took our case directly to Capitol Hill and into the districts. We would no longer rely on a feckless Administration.

Not traditional diplomacy, it still advances our interests in Washington.

The conditions for ‘getting it done’ in Washington have ‘evolved’ again.

Politics are polarized making it harder to find compromise. Messaging through social media is instant and driven from every point. The rise of big money, supported by two Supreme Court decisions, increases the power of special interests to the detriment of deliberative, consensus-driven public policy.

We need to recalibrate our game.

For corporations, the lesson is that social engagement – explaining projects to the community – is here to stay.

For government, strengthen our outreach effort to complement the work of Ambassador Gary Doer and our diplomats. Every minister travelling to Washington should call on Congress.

Encourage more congressional outreach by MPs like Rob Merrfield. In June, the interparliamentary caucus , re-energized by co-chairs Janis Johnson and Gord Brown, host their U.S. counterparts in Ottawa. The Halifax International Security Forum agenda always has a place for U.S. senators.

Second, get to know the potential 2016 candidates and their staff so they know more about Canada.

We also need to know more about the United States. It’s time for a serious parliamentary study; the last comprehensive report was in 1978.

Third, engage more at the state level – targeting state legislators and, especially governors.

In 2010, the premiers met the governors to smooth the path to procurement reciprocity. Why not another meeting around the logistics of continental supply chains? Or carbon pricing? Or fracking standards?

Cutting our consulates was a mistake. Aim for a presence in every state for the 2016 presidential election.

Keystone is delayed, not doomed. Learn from this episode. Lift our game in the United States.

A former diplomat, Colin Robertson is vice president of the Canadian Defence and Foreign Affairs Institute and a senior advisor to McKenna, Long and Aldridge LLP.

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