Secretary of State John Kerry, who fought for climate change legislation during 28 years in the Senate, may seek green offsets as part of the decision, although such action may be modest and unlikely to spark resistance from pipeline advocates, said two officials with knowledge of his thinking.
In Canada, Natural Resources Minister Joe Oliver has said his government isn’t designing oil and gas emissions rules to appease the U.S. on Keystone, although Alberta provincial officials say they’re discussing the possibility of tougher emissions standards.
Obama may have some offset options, said Daniel Weiss, director of climate strategy at the Center for American Progress, a Washington policy institute with ties to the administration. That includes making a firm commitment to issue new U.S. rules on limiting carbon emissions from existing coal- fired power plants, said Weiss, who opposes the pipeline.
The U.S. Environmental Protection Agency will soon issue a standard that will effectively bar construction of new coal- fired power plants that lack carbon-capture technology. The rule, opposed by companies such as Southern Co. and American Electric Power Co., won’t cover older plants, with the administration saying such rules likely will come later.
Meanwhile, the administration could seek environmental concessions from Canada, with the government agreeing to “adopt real and steep reductions” in carbon pollution from tar sands oil production and other sources, Weiss said.
Alternatively, the U.S. could push Alberta for changes, including adopting a tougher carbon tax than the C$15-per- metric-ton levy for companies that emit above current limits. The money goes into a fund that invests in emissions-reducing technology.
Industry groups backing the pipeline say linking approval to climate-change initiatives isn’t appropriate.
“We really do believe that the Keystone project stands on its own and is fully justified on its own,” said John Kerekes, Midwest regional director for the oil-industry-backed American Petroleum Institute. “We don’t think that the greenhouse gases issue is as big as some have made it out to be.”
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.