Unit 5: Canada and the Global Economy

Ch. 16: International Trade

 

Keystone XL rejection signals ‘new normal’ for climate change approach

We’re going to have to keep some fossil fuels in the ground,” U.S. President Barack Obama says.

 

Evan Vucci / AP

 

 

 

 

 

 

 

 

 

 

 

Demonstrators cheer during a gathering in front of the White House to celebrate President Barack Obama's rejection of the Keystone XL pipeline on Friday, Nov. 6, 2015, in Washington.

 

By: Tyler Hamilton Climate and Economy Reporter, Published on Fri Nov 06 2015

 

Climate activists were walking tall Friday after U.S. President Barack Obama delivered a final blow to the controversial Keystone XL pipeline project.

 

Obama attempted to walk down the middle of two extremes — on the one end, claims that the oil pipeline would be an express lane to climate disaster, and on the other, suggestions it would be a silver bullet for job creation and economic growth.

 

The pipeline, he explained, simply wasn’t in America’s national interest. It wouldn’t be a big contributor to economic growth, lower gas prices, or enhanced U.S. energy security.

 

Looked at in that context, Obama said the idea of importing “dirty oil” made no sense. “The Keystone pipeline has occupied what I, frankly, consider an overinflated role in our political discourse.”

 

But environmentalists were quick to point out the symbolic importance of Obama’s decision, the timing of which was not a surprise.

 

“The rejection sets a new and important precedent in the run-up to the Paris climate talks that we hope Prime Minister Trudeau will take to heart,” said Tzeporah Berman, an adjunct professor of environmental studies at York University.

 

“Why? Because it’s 2015,” she added, making reference to Trudeau’s answer when asked this week about gender balance in his cabinet.

 

It’s been a tough year for the oil industry. This week, New York’s attorney general opened a tobacco-style investigation into ExxonMobil in response to reports the company publicly withheld internal research that showed climate risks were real and serious.

 

Persistently low oil prices have led to project delays and large job cuts, and a new NDP government in Alberta has pledged to get tougher on emissions from the oil sands.

 

Observers said Obama’s decision to reject Keystone XL just four weeks before the start of the Paris climate summit – and a week or two before Alberta releases its own climate plan – was likely no coincidence.

 

Dan Zilnik, president of Calgary consultancy Oil & Gas Sustainability, said Obama wanted to send a strong signal that 2015 marks the beginning of a major energy transition and that business-as-usual is no longer acceptable.

 

“That’s the tone of Obama’s rejection,” said Zilnik. “What’s become increasingly clear is investments have to be made now by thinking how the world will be very different than it is today. That’s a huge mind-shift for the industry.

 

“A lot of companies are asking themselves are they oil and gas companies or are they energy companies.”

 

Obama said he wasn’t prepared to undercut America’s climate leadership by approving Keystone XL, and while acknowledging oil and gas as an important part of the transition to clean energy, insisted that the U.S. hold itself to a high standard.

 

“Ultimately, if we’re going to prevent large parts of this Earth from becoming not only inhospitable but uninhabitable in our lifetimes, we’re going to have to keep some fossil fuels in the ground,” he said.

 

Simon Dyer, a climate expert with Calgary think tank the Pembina Institute, said Keystone XL may have only been a single pipeline project but it became a proxy for a broader discussion that Canada hasn’t yet had.

 

“Can Canada prosper while continuing to not take action on climate change? This Keystone decision shows that climate change, and consideration of it, is now the new normal with new infrastructure projects,” Dyer said.

 

While Keystone XL was only one project, it’s likely that future projects will face the same protests and pressures now that climate activists have a major win under their belt.

 

Summary

            In an article written by Tyler Hamilton, and published by the Toronto Star on November 6th, 2015, it is learned that Barack Obama has rejected the Keystone XL pipeline. Many activists celebrated following the announcement made by Barack Obama to officially cancel the Keystone XL pipeline project. Obama attempted to look at both the advantages and disadvantages of the pipeline, eventually saying that “it simply wasn’t in America’s national interest.” However, environmentalists were quick to point out the importance and significance of Obama’s decision. “The rejection sets a new and important precedent in the run-up to the Paris climate talks that we hope Prime Minister Trudeau will take to heart,” said Tzeporah Berman. Observers say the timing of the decision was no coincidence. The announcement came four weeks before the Paris climate summit, and Obama likely wanted to send the message that 2015 is the year of a major energy transition. In his announcement, he said “if we’re going to prevent large parts of this Earth from becoming not only inhospitable but uninhabitable in our lifetimes, we’re going to have to keep some fossil fuels in the ground.” While the Keystone XL pipeline is only one project, it’s likely that future projects will face the same protests and pressures from climate activists in order to preserve the resources that we have left on Earth.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States president, Mr. Barack Obama announced on November 26th, 2015 that he will reject the Keystone XL pipeline project for future advancements

 

Economic Concept

            The Keystone XL pipeline is a pipeline that would have transported oil between Canada and the United States. Barack Obama rejected this pipeline, and this directly relates to the subjects covered in class. In class, the topics of decision making and opportunity cost have been covered. Decision making is the action or process of making various choices, and Barack Obama had to make a very important one. He had to decide whether to allow for the construction of the Keystone XL pipeline. He had to weigh the opportunity cost, which is the loss of potential gain from making one choice over another, and determine whether it is more beneficial to construct the pipeline, or to not construct the pipeline. Natural resources are land and all unprocessed non-human resources used to produce goods and services. Crude oil is the natural resource that the Keystone XL pipeline would have transported from Alberta to various locations in the United States. As crude oil comes from the land, it is a natural resource. By not accepting the Keyston XL pipeline, the United States is practicing the act of saving, which is the part of current income or assets that is not spent. They are saving money on the construction of the pipeline, and they are also saving oil by not having to drill as much of it out of the ground.

 

Decision Making: The action or process of making various choices

 

Opportunity Cost: The loss of potential gain from making one choice over another

 

Natural Resources: Land and all unprocessed non-human resources used to produce goods and services

 

Savings: The part of current income or assets that is not spent