On Thursday, Nov. 10, 2011, Canadian Prime MinisterStephen Harper, seated in his Ottawa office across from Parliament Hill, took an urgent call from U.S. President Barack Obama. Harper’s advisers were listening intently around a muted speakerphone in an adjoining room.
The State Department, Obama said, would be making an announcement later that day putting the Keystone XL pipeline project on hold. There was no choice, according to the president. Nebraska wanted the route changed to protect a key aquifer under millions of acres of prime farmland. This would necessitate a new environmental assessment. He assured Harper the call wasn’t a game changer; neither a yes nor a no, just a delay.
Harper was far from assured -- he was irritated. The project had already undergone three years of study and was, so the Canadians believed, on the cusp of approval. Delay, he told Obama, served no one’s interest.
By the time Harper hung up, according to people with knowledge of the episode, he had sized up the potential economic calamity for Canada and its oil ambitions. Western Canada’s land-locked Alberta oil sands hold roughly 168 billion recoverable barrels of heavy crude known as bitumen. America gobbles up almost all of Canada’s oil exports. An energy research group in Calgary had run the math: If Keystone died, it could cost Canada C$632 billion ($573 billion) in foregone growth over 25 years -- 94 percent of it from the economy of Alberta, the province Harper calls home.
So here was Obama, in Harper’s view, jeopardizing Canada’s welfare by throwing a sop to his anti-Keystone environmental supporters. He had blinked and might well blink again. A year or two could be three or four. Or never.
That the U.S. couldn’t be counted on to take Canada’s oil came as a shocking epiphany, said a former senior government adviser with knowledge of the call who asked not to be identified because the person isn’t authorized to speak publicly.
The president’s call that day jolted the Canadians awake. It convinced Harper that Obama was treating a long-presumed “special relationship” between Canada and the U.S., enshrined in the 1989 Free Trade Agreement, as a political football. It would set a brittle tone on both sides of the border as the Keystone battle became a contest of contrasting political wills and sensibilities as much as a fight over oil development.
It is a clear choice. Everyone who reads this article all the way through (don’t worry it gets even better) and some of the many comments it generated, will find plenty of evidence to decide whether you sympathise with Obama or Harper.Back to top