The Keystone XL oil pipeline remains a key issue in the presidential primaries, but cheap crude oil, shifting politics in Canada and global warming fears may kill the project.
Oil prices are stuck below $50 a barrel and production has dropped across Canada, including in the province of Alberta where support is crucial for Keystone XL, reports The Los Angeles Times. Oil rig activity has dropped by 50 percent and companies’ profits are expected to be half of last years, causing further distress across the North American oil industry.
Oil giants Exxon Mobil and Chevron reported a more than 50 percent drop in profits in July. Exxon raked in $4.2 billion last quarter, but that’s less than half of what the company earned the previous year. Chevron earned $571 million last quarter, which is 90 percent below what the company earned the second quarter of 2014.
On top of low oil prices, Canadian Liberal Justin Trudeau’s electoral victory Monday night makes Keystone’s future uncertain. While Trudeau supports the project, he wants tighter environmental oversight and reduced emissions before it moves forward. South of the border, American politics aren’t making things easier for Keystone supporters either.
President Barack Obama has had six years to approve the project, but has delayed making any decision on whether he’ll allow oil to be moved from Canada to the U.S. Gulf Coast. Obama has put more effort on green energy initiatives and Environmental Protection Agency regulations. Furthermore, the upcoming United Nations climate summit in Paris means it’s unlikely Obama will approve the project — lest he upset environmentalists.
Despite these hurdles, TransCanada, the company trying to build Keystone XL, remains hopeful the project will move forward.
“If the project is judged on its merits, it’ll be approved,” Mark Cooper, a spokesman for TransCanada, told The Los Angeles Times. “If it’s judged on science over symbolism, it’ll be approved.”
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