As Keystone ruling nears, Canada short on time for climate plan

Sun Dec 8, 2013 8:00am EST
 
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By Patrick Rucker and Nia Williams

WASHINGTON/CALGARY Dec 8 (Reuters) - Canada is running out of time to offer U.S. President Barack Obama a climate change concession that might clinch the controversial Keystone XL oil pipeline, as the country's energy industry continues to resist costly curbs on greenhouse gas emissions.

Two years of negotiations between the Canadian government and the energy sector to curtail carbon pollution have not produced an agreement. Oil producers have balked at anything more than the 10-cents-a-barrel carbon tax imposed by the province of Alberta.

Late last month, Environment Minister Leona Aglukkaq pointed to "good progress" in the talks but was unable to say when a resolution might come.

Concessions from Canada would make the pipeline more palatable in Washington, experts say, since Obama has made fighting climate change a second-term priority and has said that Canada could do more to reduce carbon emissions.

By linking Alberta's fields to refiners in the Gulf Coast, the 1,200-mile (1,900-kilometer) Keystone XL pipeline would be a boon to an energy patch where oil sands are abundant but lead to more carbon pollution than many other forms of crude.

Keystone's foes say that burning fossil fuels to wrench oil sands crude from the ground will worsen climate change, and that the $5.4 billion pipeline, which could carry up to 830,000 barrels a day, would only spur more production.

Increasing oil sands production will put Canada on track to miss its target of curbing greenhouse gas emissions by 17 percent below 2005 levels by 2020, according to a government report (full report:).

Keystone supporters say that is why Canada would be wise to offer a carbon-trimming plan before the White House decides the pipeline's fate.   Continued...