The Keystone Punt and Political Culture....

I was running around town today when my phone started buzzing with alerts from the various news sites I subscribe to. Several of them brought me the news that President Obama had once again delayed a decision on the Keystone XL pipeline, this time indefinitely. I couldn't help but laugh. There are plenty of people that think this project is a "no brainer." Yet, as I have been arguing for some time now (see February 2 post, for example), there is little incentive for Obama to approve this project. It now appears that no decision will be made until at least the first quarter of 2015, at the earliest. By then, the approval picture will be even murkier since the President will officially be entering lame-duck territory, and will have to work harder to remain relevant as the jockeying for the 2016 nomination in both parties sucks up all of the political oxygen.

Jaime Fuller of the Washington Post had an interesting take on how the politics of delay (Keystone XL and Obamacare) are cutting in advance of 2014 (Link to story). In some cases the delay is providing political cover for vulnerable Democrats to rail against the administration. In others, it buoys the President's key supporters (See Ed Rogers' piece in the WP also).

However, even more interesting is the nature of the surprise coming from Canadians about all of this. Alberta Premier Dave Hancock issued a statement today once again emphasizing stability, security and, jobs. The Keystone XL debate isn't really about any of those things (see earlier blog posts).

An important, and overlooked, aspect of this whole debate actually swirls around the different regulatory and institutional cultures in both countries. In a veiled critique of the U.S. regulatory process as politicized and corrrupt, Premier Hancock also said that "predictable and independent regulatory processes are in the interests of all participants." TransCanada Pipelines' CEO, Russ Girling was equally grumpy and could not understand why Keystone XL was being delayed when similar projects sailed through.

"Keystone XL, carries the same oil and also crosses the 49th parallel. [The original Keystone project  took] just 21 months to study and approve. After more than 2,000 days, five exhaustive environmental reviews and over 17,000 pages of scientific data, Keystone XL continues to languish.”

I really hope neither TransCanada nor the Alberta Government seriously believe Keystone XL is about flawed regulatory processes or that such issues are best left to technocratic regulators alone. Yet, it's possible this is what they think. My colleague Ian Urquhart has been working on a book on oil sands development and the environment in Alberta. Part of his research has led him to look more deeply into how the regulatory processes in Canada and the United States function (see recent paper on the subject). His argument depicts two very different regulatory processes; one, in the United States, that is so open and transparent as to lend itself to near-paralysis; the other, Canada's, comparatively closed with limited entry points for stakeholders to participate in the kind of debate we see taking place over Keystone XL in the U.S. In many ways, the Keystone XL fiasco can be read as a tale of two very different institutional and regulatory cultures; one open, the other closed. The result is that the fight over regulatory approvals for cross border projects will increasingly take place in the United States.

A number of Canadian stakeholders, including environmental NGOs feel shut out of their own regulatory process, unable to get standing within it. Yet, these same organizations have been very clever at teaming up with American organizations, many of which are well-organized and well-funded, to wage their fight in the U.S.

This line of reasoning and the research he has compiled dovetail entirely with my own anecdotal experience working trade policy in the U.S. government. In the Spring of 2000, the United States Trade Representative began soliciting public comments on what the U.S. position ought to be as the expiration of the 1996 Softwood Lumber Agreement loomed. There were well over 100 submissions from stakeholders, more than a third of which came from Canadian First Nations and environmental organizations. A complaint running through many of them was that there were no avenues of input through which to shape the Canadian position. 

A lot of the Canadian commentary over Keystone XL has depicted the American environmental community as comprised of nothing but radicals. Depicting organizations like the Natural Resources Defense Council, for example, as radical strains credulity. They are among the most respected, well-organized, constructive, professional, and stable environmental stakeholder organizations in Washington, D.C. and are regularly a part of government-sponsored consultations. Depicting them as radicals who have hijacked the Keystone XL approval process says far more about Canada's own (in)experience with these kinds of processes than it does about the impact of interest group competition in the U.S.