Keystone foes press Obama to offset pipeline climate impact

Power Plants

“This project has been under a tremendous amount of pressure,” Tezak said. “It’s been rerouted. It’s been restudied. I don’t know how much blood you can get out of a turnip at this point.”

If the project is approved, the administration may simply want to marry any future pipeline approval with the promise of power-plant rules for existing generators, said Michael Levi, a senior fellow at the Council on Foreign Relations and author of “The Power Surge,” which examines the fight over the future of U.S. energy policy.

“I really doubt the administration wants to invest a lot of time in trying to change Canadian energy policy,” Levi said, adding that China and India have far-higher carbon emissions. “To the extent that there’s a trade to be done domestically, it’s not about the companies that would be affected directly by the pipeline. It’s not about oil companies so much as changing how we use energy -- changing our power plants or our cars or trucks.”

Border Tax

Still, the potential for other approaches remain, including a U.S. border tax on Canada’s heavy crude, said Richard Dixon, executive director of the Alberta School of Business. The State Department may already have laid the groundwork for that in its analysis of the project when it compared the impact of Canadian oil to other crudes used in the U.S., he said.

Such work would have to precede the creation of a border tax, Dixon said.

“This is exactly the kind of modeling and statistical analysis that needs to be done to provide for doing that type of taxation system,” Dixon said in an interview. “They want to avoid the political bias and say okay, if we’re going to use hard numbers, what do those numbers look like?”

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