Keystone XL: Obama, Harper and Peña Nieto

On Feb. 26, President Obama vetoed the construction of the Keystone XL oil pipeline. Congress has rejected the executive branch’s decision for various reasons. This has consequences domestically, as well as toward relations between the U.S. and Canada, and to a lesser extent, between the U.S. and Mexico.

We are talking about the construction of a 900-kilometer-long (560-mile) pipeline, from the province of Alberta in Canada to the Gulf of Mexico in the state of Texas. The objective: to carry heavy petroleum from the northeastern Canada to the Gulf. If the subject was merely the construction of a pipeline, the decision would have been made back in 2008. The time has been much longer than expected for multiple reasons: arguments both for and against Keystone.

There are weighty political reasons. Obama can make executive decisions or veto the measures that affect national interests, and the interests, in this case, are to avoid damage to the environment. Facing a Republican majority in Congress, the chief executive is increasingly seen as more limited due to gridlock, which makes it impossible to make decisions or implement policies unless they are favorable to the Republican Party.

The system of checks and balances derived from the Founding Fathers of the United States has become ineffective. It was introduced to prevent one of the three powers from concentrating too much control and becoming an authoritarian actor, seeking equilibrium between them. Currently, this is not happening. The system is used to pit Democrats against Republicans and vice-versa, without considering the national interest. It’s the fight of “all against all,” without a vision for the country. It is at this point that the veto from the chief executive becomes an excellent mechanism for unclogging intolerant measures. In this case, the Republicans defend themselves by saying that the pipeline will create a large number of jobs, reduce the cost of energy and increase supply; the Democrats pose environmental reasons to support the veto. The consequential damage from the construction of the pipeline, they argue, will have global repercussions. Further, they maintain that with such low petroleum prices Keystone isn’t necessary, since they can bring oil in from other parts of the world for less.

Since Obama became president, this is the third time he has used the veto. The other two occasions were on minor topics and did not affect relations among three countries. With Canada, the U.S. position has stretched bilateral relations. Prime Minister Stephen Harper is very angry about the slowness of the process; but really, he is angry because he agrees much more with Republican values than with Obama’s. Furthermore, Alberta is the most competitive province and one of the main provinces in importance to the Canadian economy. The petroleum market is fundamental to Alberta, and stopping the construction of Keystone will have great consequences to its economy, its employment sector and to future migration. Alberta’s exportation of petroleum sustains, to a large extent, the economy of the country. Canada, despite being an important partner for the U.S., has been affected on many occasions — albeit by the North American Free Trade Agreement (NAFTA). It occurred during its admission into the Trans-Pacific Partnership, which was limited because the Americans did not want to be added. To his discomfort, Harper has not only postponed the trilateral summit that Canada will host this year, but has also said that TransCanada Corporation can sue the U.S. government for the effects on the company’s investments caused by the six-year delay in decision-making — employing the same mechanisms as NAFTA. However, the weight of American hegemony remains and the costs can only be economic. North America does not consider this. The issue of Keystone imposes itself on the next election.

Mexico has a double interest in harnessing the veto. In 2014, the U.S. bought less petroleum from Canada either because Keystone didn’t exist or to revise its objectives according to the drop in production. It is necessary to properly implement the reform, but with sufficient transparency, in order to avoid more domestic problems and gain legitimacy abroad.