Keystone's fate dependent on Kerry, America's probable next secretary of state -

Keystone’s fate dependent on Kerry, America’s probable next secretary of state


WASHINGTON – John Kerry is expected to breeze through his U.S. Senate confirmation hearings next week to become America’s next secretary of state — one whose devotion to environmental issues is making proponents of TransCanada’s Keystone XL pipeline nervous.

The longtime Massachusetts senator, after all, has long been one of the most fierce climate hawks on Capitol Hill, leading unsuccessful efforts three years ago to push greenhouse gas legislation through Congress.

Yet financial disclosure records also show Kerry has investments in two Canadian oil companies that have pushed for Keystone XL approval, including as much as US$750,000 in Suncor. The senator would likely be required to divest those holdings.

In the coming weeks, the State Department will determine the fate of the controversial pipeline because it crosses an international border. The $7 billion project would carry millions of barrels of bitumen extracted from Alberta’s carbon-intensive oilsands to the U.S. Gulf Coast.

Kerry has provided no clues about Keystone’s prospects since being tapped by the Obama administration as Hillary Clinton’s replacement at State.

“I’ve got confirmation hearings — you’ll hear about it,” Kerry told reporters recently on Capitol Hill when asked if Keystone would get the greenlight.

American environmentalists, however, aren’t resting on their laurels waiting for Kerry’s limousine to pull up to the State Department. A coalition of environmental groups released a pair of reports on Thursday suggesting Keystone’s impact on the climate is much worse than previously believed.

The reports claim Keystone XL would play a critical role in tripling oilsands production by 2030, which in turn would result in far more greenhouse gas emissions than originally estimated.

One of Kerry’s closest allies on climate issues in Congress — Rep. Henry Waxman of California— issued a stern statement on the findings.

“The new reports show that TransCanada’s Keystone XL pipeline is the key that will unlock the tarsands,” he said.

“If the pipeline is approved, the world will face millions more tons of carbon pollution each year for decades to come. After Hurricane Sandy, devastating drought, unprecedented wildfires, and the warmest year on record in the United States, we know that climate change is happening now, we have to fight it now, and we must say no to this pollution pipeline now.”

Pipeline proponents, meantime, were also busy on Thursday.

Ten Republican governors and Saskatchewan Premier Brad Wall sent a joint letter to President Barack Obama urging him to approve the pipeline, calling it crucial for energy security and the future economic prosperity of both countries.

“We wanted to work together with our friends in the United States, with these governors, and put forward what we think is a very compelling case for the U.S. administration to approve Keystone,” Wall told reporters in Regina.

“Just because all facts on all sides are heard doesn’t mean we should stop trying to influence the decision.”

Wall added he’s “hopeful” Kerry, as secretary of state, would green-light the pipeline.

“We had a chance to meet recently … and we had an excellent discussion about energy and we talked about oil,” Wall said.

“It’s better for the United States, it’s better for Canada, if North America has a greater energy independence. I think Sen. Kerry shares that.”

TransCanada officials have put on a brave public face, pointing to the recent all-clear Keystone received from Nebraska officials after they proposed an alternate route for the pipeline around an ecologically fragile area of the state at Obama’s suggestion last year.

While Kerry’s confirmation seems a sure thing, there are nonetheless some trouble spots in terms of his financial portfolio. One of his investments includes stock in Suncor and Cenovus Energy, two Calgary-based oil companies that are pro-Keystone XL.

Kerry and his wealthy wife, Teresa Heinz Kerry — the heir to the Heinz ketchup fortune — have a large collection of international investments. Some of them would clearly pose conflicts of interest for him as secretary of state.

Pending an ongoing ethics review — customary for would-be cabinet secretaries — Kerry will likely need to divest some holdings or place them in blind trust. His Suncor and Cenovus stock would probably be among them.

“As is routine for any Senate confirmed nominee, Senator Kerry’s financial disclosure form and ethics agreement will be released as part of the nomination and confirmation process,” the White House said this week.

Kerry’s confirmation hearings begin on Thursday with a Q and A session with the Senate Foreign Relations Committee — of which he’s the chairman. He’s expected to easily win confirmation from the committee and, ultimately, the Democratic-controlled Senate.

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