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  December 23, 2016

Canadian PM Trudeau Signals He'll Work with Trump to Restart Keystone XL

DeSmog Blog's Steve Horn says the move would be an environmental and ecological disaster
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JAISAL NOOR: Canadian Prime Minister Justin Trudeau recently announced he's looking forward to working with President-elect Donald Trump to revitalize the Keystone XL Pipeline. Last November, President Obama cited the threat of climate change when he blocked the over 1,700-mile pipeline that would carry 830,000 barrels of Alberta tar sands a day through Canada and the U.S. for processing and transportation.

To break this down I spoke to DeSmogBlog's Steve Horn.

STEVE HORN: This is several things going on at once. Number one, Trudeau, he campaigned in support of Keystone XL, so it's not shocking that he's going out and saying he still supports Keystone XL. What he has now, in the United States, though, is an ally on Keystone XL. Donald Trump ran on a campaign promise to restart the Keystone XL, get the negotiations going again around that between the U.S. and Canada. And in recent weeks there's been news floating around that the Trump Administration may axe the Executive Order which created the structure where the U.S. Government and the State Department and the President permit these types of U.S./Canada pipelines. So, it could be a scenario which under the Trump Administration, we won't even have the same sort of thing which we had on the Obama Administration, which it had to go through an intense review in the State Department and the environmental concerns could be weighed and all of that.

So that's on the table, that's sort of the big thing on the table for Keystone XL and other cross-border pipelines beyond Keystone XL. And so as was seen under the Obama Administration, this is one of the pivotal fights of the environmental community. The environmental community has said if Trump moves forward on this, they will get engaged again on this and wage a fight. So it's unclear exactly, the form and the content over how the ensuing Trump Administration will move forward on Keystone XL, but it's clear that they are going to move forward on it quickly as he's said in interviews and his surrogates have said.

JAISAL NOOR: And complicating things with Trump's bid for Secretary of State, Rex Tillerson, who's the former head of Exxon, a longtime Exxon employee -- and, as you note in your reporting, Exxon has significant holdings in the Canadian tar sands. So could this create some conflict of interest and what does this mean for restarting of the deal?

STEVE HORN: The State Department will have a full -- under, at least the current set of circumstances -- the State Department has full review over this pipeline because it crosses the U.S./Canada border and because of an Executive Order signed decades ago this would be in the hands of Rex Tillerson if he gets through nomination. And Exxon has lots of tar sands assets -- it's one-third of its entire reserves on its books is tied up in the tar sands. We're talking about a company that has reserves all around the world. It's important to point out the tar sands are the third biggest reserves in the world behind the oil reserves in Venezuela and then the oil reserves in Saudi Arabia. So this is a massive thing for Exxon.

Rex Tillerson, it still hasn't been determined what he's going to do with his stock holdings in Exxon. He has two million stock shares. He recently announced his retirement after he was nominated by Trump, to become Secretary of State. And so there's 300,000 of those shares go to him immediately, there's still 1.7 million that potentially, Rex Tillerson could, depending on what he does with his stocks, if he defers them, which is the conventional way that they do things at Exon. That would mean that he could profit, personally, these sorts of decisions over pipelines like Keystone XL -- it's really unclear what he's going to do with those stocks. It's something I expect will be in the news in the weeks ahead. I think that it's something that will come up in the hearings in the Senate, too, for his confirmation. But it's a huge thing. Even regardless of what he does with the stocks, obviously, a guy who has lots of friends in the oil and gas industry and for his company, a company that he will be departing from, has a huge stake in more tar sands being pumped out of the ground.

So, regardless of what he does with the stocks, it's definitely a conflict of interest and it's unclear if he will take himself out of the decision-making process or not. These are questions that I'm guessing will be asked during his confirmation hearing.

JAISAL NOOR: And what do you make of Justin Trudeau, the Canadian Prime Minister's rhetoric around this? Because on the one hand, he has joined President Obama in blocking some off-shore drilling in the Arctic... and he's arguing his work on climate change is making the east pipelines -- which is the Keystone XL and two other ones he's recently approved -- which have caused significant backlash and promises of resistance from, especially indigenous communities in Canada. Talk a little bit about... do you see that as hypocrisy on his part, saying he's working on climate change but also endorsing the extraction of tar sands, which is widely considered the dirtiest way to extract fossil fuels?

STEVE HORN: Tar sands are 17% more polluting in terms of carbon content than conventional crude. So I think what Trudeau is coming from is -- he's a true believer, sort of, even without saying it directly -- this is basically a version of cap and trade where you can put a certain amount of carbon in the atmosphere and then trade that off with good things. This is something that Obama tried to push through in 2009 through the Cap and Trade Bill. And it actually came under fire by environmental justice advocates and people in the environmental community because of both scientific concerns, that that's not actually a reality. But also just environmental justice concerns that these bad projects, the ones that they're capping, they affect communities, frontline communities where these projects are.

So the tar sands are a good example. There's a huge swath of the indigenous population of Canada that lives close to the tar sands that will be harmed by these projects. Trudeau would argue, "Oh that's just the... we need to pump up the tar sands out of the ground, it's part of the North American energy portfolio. But we'll do some good things." And so, both from an environmental justice perspective, it's troubling, but also, as scientists have pointed out, that there's really no evidence that you can do cap and trade and it will actually make a mathematical difference in a positive direction for climate change. So, that's exactly, I think, where Trudeau is coming from.

JAISAL NOOR: All right, Steve Horn, thanks so much.

STEVE HORN: Thanks for having me.




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