The Keystone XL Pipeline bill would have authorized a 1,179-mile pipeline. The debate is a hot topic for environmentalists and North America's energy industry. The Keystone Pipeline has been under review for the past six years. Just this past Tuesday, Obama promised to veto the approval. ________

TO THE SENATE OF THE UNITED STATES:

I am returning herewith without my approval S. 1, the "Keystone XL Pipeline Approval Act." Through this bill, the United States Congress attempts to circumvent longstanding and proven processes for determining whether or not building and operating a cross-border pipeline serves the national interest.

The Presidential power to veto legislation is one I take seriously. But I also take seriously my responsibility to the American people. And because this act of Congress conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest -- including our security, safety, and environment -- it has earned my veto.

BARACK OBAMA

_______________________________

Related article: KEYSTONE XL PIPELINES BIGGEST OPPONENT IS ITS MISGUIDED PUBLIC PERCEPTION

Journalist Amy Harder and Colleen McCain Nelson explain in detail;

"Mr. Obama vetoed the legislation, not the pipeline itself. The administration retains the ultimate authority over the pipeline, and the veto doesn’t affect the review, which is in its final stage.

The move prompted immediate criticism from Republicans, who have described the TransCanada Corp. project as a jobs and infrastructure measure. Majority Leader Mitch McConnell (R., Ky.) said on the Senate floor Tuesday that the chamber plans to hold a vote to override the veto by next Tuesday, although neither the Senate nor the House appears to have the requisite two-thirds of votes for an override.

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Keystone Veto to Test Whether Obama, GOP Can Move Forward Barack Obama Has Issued Fewer Vetoes Than 75% of Presidents Tuesday’s veto was Mr. Obama’s third since he became president in 2009. His other two vetoes were on relatively minor bills: one involving legislation dealing with the notarization of mortgages, and the second rejecting a spending bill for technical reasons.

Many Democrats oppose the project, saying it wouldn’t create many permanent jobs and citing environmental risks that come with pipelines, including spills.

While the rejection of the Keystone legislation was no surprise, it will test whether the White House and Republicans can push forward on some shared interests while undertaking battles on other issues. Mr. Obama has threatened to veto several other Republican bills, among them legislation to alter the Affordable Care Act and to impose new sanctions on Iran.

The Keystone action also comes as a standoff over funding the Department of Homeland Security escalates, with Republicans trying to use the issue as leverage to block the president’s executive actions on immigration.

Republican leaders in Congress and Mr. Obama have pledged in recent weeks to work together on areas such as easing trade deals and overhauling tax laws. But Tuesday’s veto, along with other emerging conflicts, has brought into focus the divisions that could impede efforts for a Democratic president and Republican-controlled Congress to forge deals.

“President Obama has rejected our attempt to work together,” House Majority Leader Kevin McCarthy (R., Calif.) said in a statement.

White House officials repeatedly have said that disagreements over one issue shouldn’t become obstacles to agreement on any other issue. The skirmish over Keystone could test that aspiration.

“The question is whether Congress and the administration will be able to pursue a two-track relationship, where they disagree where they must and agree where they can,” said William Galston, a senior fellow at the Brookings Institution and a former policy adviser to President Bill Clinton.

In a message to Congress, Mr. Obama cited the continuing State Department review as the reason for his veto, saying that the legislation “conflicts with established executive branch procedures and cuts short thorough consideration of issues that could bear on our national interest—including our security, safety and environment.”

Asked if the Obama administration might eventually approve the pipeline after the State Department review is complete, White House spokesman Josh Earnest said Tuesday: “That possibility still does exist. This is an ongoing review.” Yet, Mr. Obama has spoken skeptically of the pipeline in recent months.

As proposed, the Keystone XL pipeline would move as many as 830,000 barrels of oil a day, mostly from Canada’s oil sands to Steele City, Neb., where it would connect with existing pipelines to Gulf Coast refineries. As many as 100,000 barrels of that oil could come from North Dakota’s booming oil fields.

If completed, the pipeline system would span 1,700 miles and cross six U.S. states. TransCanada already has spent $3 billion on the project, and the total cost could surpass $10 billion—more than twice an initial estimate—if it is ever built.

On its website Tuesday, TransCanada, based in Calgary, Alberta, said it “remains fully committed” to its project, despite Mr. Obama’s veto."

The opening words of the International Energy Agency’s 2013 World Energy Outlook (WEO) cannot be more to the point. “Many of the long-held tenets of the energy sector are being rewritten,” the outlook, states. “Major importers are becoming exporters, while countries long-defined as major energy exporters are also becoming leading centres of global demand growth.” Widely viewed as the authoritative voice on global energy issues, the International Energy Agency (IEA) each year in November sets out the state of the world’s energy landscape now, and forecasts how it will unfold in the coming decades. As it did a year ago, the 2013 WEO points to on-going fundamental structural changes in the supply and demand of the global energy market through to 2035. The implications for the United States and Canada, the largest energy supplier to the U.S., are profound, in both economic and geopolitical terms.

Essentially, the WEO makes three key points. First, the “centre of gravity” for energy demand is shifting to emerging economies such as China and India, while demand from developed nations will be flat. Second, the U.S. will meet all its energy demands domestically, which in this case means from growing domestic production and imports from Canada, by 2035. Third, that global energy demand will increase by a third in the next two decades, with CO2 emissions growing by 20 percent, leaving the world on a path of an increase in temperature of 3.6 degrees centigrade, “far above the internationally agreed 2 degree C target.” It forecasts that oil supply will continue to grow, rising from 89 mbd in 2012 to 101 mbd by 2035.

But the Outlook also points to strong growth in the production of renewable energy. Based on policies currently in place and anticipated efforts going forward, the WEO forecasts that almost half of the increase in global power generation by 2035 will come from renewable energy sources.

So, what does this mean in a U.S.-Canadian context? It clearly points to a secure energy future, one with a much more domestic, or North American, focus. Assuming the forecasts are accurate—and it’s worth noting that IHS-CERA energy forecasts on growth in U.S. energy production are similar to those of the WEO—the long-sought-after goal of energy independence for the U.S. is attainable as part of an on-going energy partnership with Canada.

Currently, Canada is the largest oil supplier to the U.S., sending approximately 2.5 million barrels a day (mbd) to the U.S. By comparison the U.S. imports 1.1 mbd from Saudi Arabia and 1 mpd from Venezuela. But that configuration will change as domestic oil production, largely from the rapid growth in tight oil, will make the U.S. the largest energy-producing nation by 2020. But even becoming the world’s largest oil producer does not mean the U.S. will be able to claim energy independence. It’s estimated that by 2035, the U.S. will still need to import approximately 3 mbd of oil daily, all of which can be supplied by Canada.

It is the potential for North American energy independence that remains a central dimension to the argument in favor of the proposed Keystone XL pipeline from Canada’s oil sands to the U.S. Canada and the U.S. already share the world’s largest and most mutually beneficial energy relationship, and in a global scenario set out by the IEA, the relationship will be key to achieving energy independence. For the U.S., a secure energy future that is not contingent on imported oil from the Middle East obviously brings with it far-reaching geo-political implications in terms of U.S. interests abroad. Imagine a world where energy strategic interests are focused on North America and do not require massive offshore international commitments to ensure a secure energy future.

But for Canada, the 2013 WEO presents a different set of challenges. As an oil-exporting nation, energy security for Canada is often cast in terms of security of energy demand. Canada produces enough oil to be energy independent, although it currently lacks the west-to-east pipeline infrastructure to supply its own energy needs in Ontario, Quebec and the Atlantic provinces. Its sole energy export market is the U.S.

So, with U.S. demand for imported oil to decline at the same time demand grows rapidly in Asia, and Canadian oil production forecast to grow, Canada needs to access what is a rapidly changing global market to achieve security of demand. That means connecting pipeline infrastructure to tidewater so that Canadian oil can be shipped into the global market to meet growing energy demand.

Just as the proposed Keystone-XL pipeline has been controversial in the U.S., with opponents concerned about local environmental impacts and the effect of increased oil sands production on climate change, similar debates are being played out over proposed pipelines west and east in Canada. The reality is that the U.S. and Canada have a deeply integrated energy relationship, which means both nations struggle with similar energy-related environmental issues.

Reflecting those close economic and energy ties, the U.S. and Canada share the same GHG reduction target of 17 percent from 2005 levels by 2020. The challenge for both nations is how to achieve that goal, with coal-fired power generation in the U.S. so dominant and the oil sands in Canada destined to expand to meet the growing global demand for oil.

As Fatih Birol, chief economist for the IEA says, the world “needs every drop of Canadian oil” to meet the demand of economic growth in the rapidly growing emerging economies. What the 2013 World Energy Outlook does is set out in clear terms the reality of the unfolding global energy scene. It is a world where demand for energy will grow and oil will remain a dominant fuel, even as sources of renewable energy grow and nations seek to address, in multiple ways, the challenge of climate change.

For the U.S., it is a future that offers the reality of what to date has been the elusive goal of North American energy independence. And, for Canada, it presents the challenge of diversifying its energy exports into the global market, while maintaining its close energy partnership with the U.S. as a key part of a secure energy future.

Dale Eisler, along with being an ICOSA partner, is the Senior Policy Fellow at the Johnson Shoyama Graduate School of Public Policy, University of Regina, Canada.