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February 14, 2013
With four million members in the United States and Canada, Sean McGarvey, president of the building and construction trades unit of the mighty AFL-CIO, is the type of Keystone XL pipeline backer the U.S. president cannot ignore.
Trade unions such as the American Federation of Labour and Congress of Industrial Organizations — the United States’ largest union federation — had a big hand in Barack Obama’s re-election, much like the environmental movement that opposes the Alberta-to-Texas oil sands pipeline.
And their patience with the anti-XL camp is wearing thin.
Unemployment in the U.S. construction industry is running at 16.1% or higher, Mr. McGarvey said in an interview, and his members and their families are “desperate” for the 20,000 construction jobs that could be had with the TransCanada Corp. project.
“We are telling the president, and have been telling the president, that a thorough review was appropriate, that following the proper protocols needed to be done to make sure that this was going to be a secure, safe pipeline … that it’s going to be constructed with the most highly skilled people in the world.”
With “all those reviews completed and the reroute around the aquifer in Nebraska done, the time is now to issue the permit.”
The U.S. environmental movement’s nasty campaign against the pipeline, the oil sands and Canada’s fossil-fuel dependent economy have left many Canadians wondering about the future of their relationship with the United States.
What’s received less attention is that there is a broad and diverse swath of Americans — from organized labour to the U.S. oil industry, from Democrats to Republicans, from big manufacturers to small businessmen — who support the project, want the energy security that it assures and want a stronger energy partnership with Canada.
Those supporters include the U.S. Chamber of Commerce, the American Petroleum Institute, the National Association of Manufacturers and the Business Roundtable.
Then there are the other large unions that signed project agreements with TransCanada to participate in the construction of the pipeline.
Indeed, the fight over Keystone XL is surfacing a rare display of affection for Canada in the United States.
“We believe our closest ally is Canada,” Mr. McGarvey said. “Canada has resources that we are currently importing from around the world, and we are spending huge amounts of blood and treasure for those imports. If we can save money, lives and blood by working with our closest ally on their natural resources that we desperately need, that is what we should do.”
Broad U.S. support for the pipeline and for getting more oil from Canada is consistently backed up by opinion polls — whether independent polls or those done for the energy sector, said Cindy Schild, the senior manager of refining and oil sands at API who leads the Keystone XL campaign.
The support is reflected in the political arena.
U.S. Congressman Gene Green, a Democrat representing the 29th District of Texas, is adamant the U.S. needs the project and has rallied support for it in the U.S. House of Representatives. Last month, he led an effort with his Republican counterparts on a bipartisan letter to the president, signed by more than 145 members, requesting approval of the Keystone XL pipeline.
“If [Canada’s oil] doesn’t come to the U.S. it will go to the Far East, and I know that we can refine it cleaner globally than most of the refineries in the Far East,” said the congressman, whose district contains three refineries that would like to replace the one million barrels a day they import from overseas with Canadian oil.
“The U.S. doesn’t have a closer friend than Canada,” he said. “I have been in Afghanistan and seen Canadian soldiers right next to ours, in some of the toughest places in the world. We are so close on so many things, why would we not do that [pipeline]?”
A similar effort has been under way in the U.S. Senate, where 53 Senators signed a letter supporting the project, which says it has “gone through the most exhaustive environmental scrutiny of any pipeline project in the history of the country.”
Senator Lindsey Graham, a Republican representing South Carolina, said he supports the pipeline because “every barrel of oil we can buy from Canada, a friend, is one less barrel that we have to buy from the Mideast, where we have a lot of enemies.
“The additional carbon content is far less of a concern to me than being dependent on Mideast oil and sending money overseas to people who hate us.”
The prospect of losing the oil sands to China is also a worry, he said. “For the Chinese to be able to successfully lock down the oil sands supply would require us to do something incredibly short-sighted and ill-advised,” the senator said. “If we have the minimum rational thought here we would close this deal.”
At the API, which represents the American oil and gas sector, there is support across the board for the project, Ms. Schild said. Even refiners benefiting from lower bitumen prices resulting from lack of pipeline capacity — a fallout from Keystone XL’s long-delayed approval — want more oil from Canada because it’s reliable.
“If we can add that 830,000 barrels of oil to the two million we get right now from Canada, you are creating a flexibility as far as the supply chain,” Ms. Schild said.
For example, that supply chain is impacted when hurricanes shut down production in Gulf, and being able to rely on oil from Canada is a relief, she said.
The economic spinoffs from oil sands development are another big incentive. From tires to work suits, U.S companies do so much work related to the oil sands that for every two jobs created in Canada, one job is created in the U.S., Ms. Schild said.
“StatsCanada, as well as our Census Bureau, have analyses that show that for every dollar that the U.S. spends in Canada, 89¢ is returned to the U.S. economy,” Ms. Schild said. “You don’t see that with our other trading partners.”
She wonders why environmental activists are targeting the Canadian project as a way to cap fossil fuels and fight climate change, while ignoring the environmental benefits of importing oil from Canada, where producers are striving to reduce all their environmental impacts.
Among the United States’ top five suppliers of oil — Canada, Mexico, Venezuela, Saudi Arabia and Nigeria — Canada is the only country that even has any regulations on greenhouse gases, she said.
“If [reducing climate change] is your end game, where do you think it’s going to be managed better? Between Canada and the U.S.? Or by putting it on ships? And what about the pollution that you create getting it to China?” she asks.
The decision is, for now, in the president’s hands, and in his first term he showed greater love for environmentalists than for energy security or even Canada.
He is expected to rule in the June-to-September time frame whether to green light the project, after delaying approval in November, 2011, and rejecting it outright in January 2012, when the environmental movement threatened to withdraw support from his re-election bid.
TransCanada resubmitted its application in May 2012 and has since started building the southern portion, which Mr. McGarvey said is employing more than 1,000 of his members.
Mr. Obama didn’t tip his hand about what he plans to do about Keystone XL in his State of the Union speech Tuesday. But his remarks on energy suggested he’s keeping his options open and favours all sources — from wind and solar to fossil fuels, even thought they are abhorred by the anti-Keystone XL campaign.
“After years of talking about it, we are finally poised to control our energy future,” the president said. “We produce more oil at home than we have in 15 years.” Energy experts say U.S. energy independence cannot be achieved without support from Canada’s oil sands.
Mr. Obama pandered to environmentalists by talking about the need to combat climate change and urged Congress to pursue a bipartisan, market-based solution.
But he also talked about the importance of creating more jobs for middle class families, echoing the demands of trade unionists such as Mr. McGarvey.
As the voices of activists get louder — 48 people were arrested Wednesday outside the White House in a protest over the pipeline and a big demonstration is planned for Sunday in Washington — so will those of the large front that supports the project. Paid advertising, a renewed push to tell the Keystone XL story by all supporters, a “grassroots component” that will borrow the tactics of pipeline opponents are planned for the coming months, said a TransCanada lobbyist who asked not to be named.
But it’s the pleas of unionized labour that are expected to be really heard.
“The bottom line is that there are thousands of voices desperately pleading with the president to issue this pipeline permit,” Mr. McGarvey said.
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