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By George Jagels Contributor February 14, 2011

United States – Canada relations are as boring as they are friendly. So, the meeting between Prime Minister Steven Harper and President Barack Obama in Washington on February 4, garnered little public or media attention. And yet, lost in the usual humdrum of U.S.–Canada summitry, the two leaders discussed an oil pipeline deal with looming implications on two contentious fronts: global warming and energy security. The deal may cause some disagreement between the two countries on key issues.

The deal is simple: build a pipeline extension, called Keystone XL, from Alberta through Oklahoma to the Gulf Coast refineries. As a result of recent improvements in technology to exploit unconventional oil sources, Canada has the second-largest reserves in the world, concentrated in the tar sands of Alberta. But oil derived from tar sands requires a significant amount of energy to process. The mining process emits more greenhouse gases than drilling for conventional (e.g., Saudi Arabian) crude. And herein lies the policy problem: How much does Washington care about its climate change and clean energy commitments relative to its economic and national security goals?

Americans will not end their transportation-based oil addiction anytime soon. Putting the “energy independence” political posturing aside, energy security—meaning stability and affordability of supply—requires imports. Americans would like to get those imports from reliable partners who do not force them to make cynical foreign policy decisions, such as supporting repressive Middle Eastern governments. In this context, Canada’s oil seems ideal: it’s reliable, affordable, and secure. Indeed, according to the latest U.S. Department of Energy analysis, the United States receives nearly 23 percent of its daily petroleum imports from Canada – by far the most. This figure more than doubles the amount of oil imported from Saudi Arabia. If Washington is worried about the effect of oil shocks on the economy—and, by extension, national power—then tar sands oil is beneficial to the nation’s security.

This argument, trumpeted by Harper and Canadian companies, has three problems. First, it rests on fears of prolonged supply disruptions from the Middle East—fears that are overblown because a drop in supply is not in anyone’s interest (least of all the oil suppliers), and is only a slight possibility. Short disruptions happened in the past, but the U.S. is better prepared to weather them now. Second, the oil market is global and Keystone XL brings oil to the world. In a crisis, it would not be our oil, and prices would still rise because other oil supplies would get redirected away from the United States. Third, as the Department of Energy concluded recently, present pipeline capacity is large enough to handle low U.S. transportation demand in 2030. Low demand would mean improved fuel-economy standards and, yes, a fuel tax.

Of course, Prime Minister Harper and a great many Canadians want to see more of their product sold to U.S. refineries. Choosing a path focused more on emissions reduction than gloomy national security scenarios will annoy Canadian producers, maybe causing them to threaten to sell their oil to China. This is a meaningless threat. If Washington pursues its climate change goals, the country will not need more pipelines than already exist. This rare disagreement between the two capitals will not significantly affect bilateral relations—America will still be Alberta’s biggest customer. But, it is a major issue on which the U.S. and its northern neighbor could part ways: one moving toward a greener future, and the other producing more harmful emissions. Such an outcome would be ironic given the respective stereotypes.

After all, national security is not the only item on the agenda. Washington pledged to lower its greenhouse gas emissions by 17 percent (from 2005 levels) at the Copenhagen conference in 2009. Yet, with another source of carbon fuel—this one 40 percent “dirtier”—driving American cars, there is less incentive to develop low emission substitutes for gasoline. Environmentalists say that now is the time to start moving toward the stated goal of a cleaner energy future. However, building more oil infrastructure works against that goal. Given political willingness to sacrifice environmental causes on the altar of economic efficacy, the greens are right to doubt that concurrent reduction in coal burning and other harmful carbon dioxide emitters would cover increased tar sands production.

Government action—whether for national security or environmental reasons—must push the consumer away from gasoline. “You can’t get off oil unless you get off oil,” Yogi Berra might have said. Canada’s reserves prove that new oil is being discovered all the time; depending on the absence of fossil fuels to spur innovation is a dangerous and foolhardy environmental bet. With no compelling national security justification to increase reliance, Washington should put its money where its mouth was in February 2009, when Obama said “To truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy.” The enticement of oil from a friendly neighbor is strong, but it must be weighed against other priorities. If Washington is serious about climate change, the President should reject the Keystone XL pipeline.

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