WASHINGTON – The Canadian government's strategy to let Washington set the pace on climate change has fallen into disarray as American lawmakers lose their appetite for aggressive carbon-cutting legislation in 2010.
Public anger exposed by Tuesday's electoral uprising in Massachusetts is resetting Washington priorities across the board, as Democrats and Republicans scramble to address economic issues in a bid to outpace an anti-incumbent mood ahead of November's midterm elections.
Few expect President Barack Obama to relinquish his agonizing quest for a health-care overhaul as priorities shift. But Washington analysts doubt the White House has the political nerve to simultaneously move forward with equally controversial cap-and-trade legislation, which many expect now will be punted to 2011.
The developments may be a mixed blessing for Ottawa, which has long held to a wait-and-see approach on U.S. decisions that could determine where Alberta's carbon-intensive oil sands fit in America's energy future.
Climate campaigners looking for aggressive American follow-up to the uncertain outcome of December's Copenhagen Summit are putting on a brave face, insisting momentum is on their side. But their enthusiasm flies in the face of several recent U.S. surveys, including a 16-state poll released Wednesday by the National Federation of Independent Business, pointing to the political unpopularity of the stalled climate and energy bill.
"Maybe we will be dead sooner because of global warming. But it is a distant risk. And the focus now is moving to bread-and-butter issues that resonate with the average hurting American," one Canadian diplomatic source told the Toronto Star.
"Cap-and-trade doesn't fit that bill. I would be astonished if there's any receptivity."
Dave Martin, climate and energy co-coordinator with Greenpeace Canada, said the developments leave the Canadian environmentalists in "a difficult situation."
"The U.S. position has been the elephant in the room for a long time from the Canadian perspective. We have supported the Obama administration on the rationale that if we give them time they will find their backbone and deliver. And now that has faded significantly. It's disheartening," he said.
But in the absence of clarity from Washington, individual states are proceeding apace with their own legislative measures to steer the U.S. toward renewable energy at the expense of fuels heavy in heat-trapping greenhouse gases like the gooey bitumen of Alberta.
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Earlier this month, California approved implementation of the world's first Low Carbon Fuel Standard, a controversial measure to impose strict new pollution limits on imported transportation fuel. The policy, which takes effect in 2011, sets a threshold of 96.88 grams of carbon dioxide equivalent per megajoule of fuel – a measure difficult even for the makers of corn-derived ethanol to meet. Many believe the new California standard will make America's largest state a tar sands-free zone.
California is the first, but is hardly alone. Late in December, 11 states from Maine to Maryland signed a Memorandum of Understanding toward the creation of a regional fuel standard modelled after the California measure. Separately, the governments of Oregon, Washington, Michigan, Wisconsin and Minnesota have been weighing similar measures.
The Consumer Energy Alliance, a Washington-based lobby group backed by many oil industry giants, sounded a warning this week on the dangers the regional efforts pose to oil imports from Alberta, noting that Washington could embrace the measures as an alternative to cap-and-trade legislation and instead push for a federal low-carbon fuel law.
The warning echoed a report last month by Washington's Council on Hemispheric Affairs, which said strict environmental measures that discriminate against Alberta oil could push Canada in search of other markets.
If so, America's loss would likely be China's gain, the energy alliance's vice-president Michael Watley told the Star, pointing to the development of Enbridge's proposed 1,200-kilometre Northern Gateway pipeline, a project to link the oil sands to Kitimat on the northern B.C. coast, placing Alberta oil on tap for the thirsty Asian market.
(On Tuesday, the project took another step forward when Environment Minister Jim Prentice announced the establishment of a three-member environmental and regulatory review panel.)
"If cap-and-trade is going to die, folks are going to be looking around at other legislative tools they can use to reduce carbon emissions or bring alternative fuels online, and we think a low-carbon fuel standard will be part of that debate (in Washington)," said Watley.
Another well-placed Washington source monitoring the plight of Alberta oil said the downgrading of climate legislation should not be interpreted as cause for celebration in Calgary.
"If you are a smart oil person from Alberta, there is no reason to relax, even for a nanosecond. If they think they've dodged a bullet, they haven't," said the source, who asked not to be identified.
In 2008, Alberta pumped an estimated 1.5 million barrels a day to U.S. markets, accounting for 14 per cent of U.S. oil imports. The Consumer Energy Alliance estimates that figure stands nearer to 18 per cent today – nearly double the imports from its next nearest supplier, Mexico.