Trudeau seeks fresh start with Obama after Keystone rejection

OTTAWA, Ontario - Canadian Prime Minister Justin Trudeau said that he was let down by President Barack Obama's rejection of the Keystone XL pipeline while acknowledging the move gives Trudeau a fresh start with the U.S. after the controversial pipeline frayed relations.

"We are disappointed by the decision but respect the right of the United States to make the decision," Trudeau said Friday in a written statement. "The Canada-U.S. relationship is much bigger than any one project and I look forward to a fresh start with President Obama to strengthen our remarkable ties in a spirit of friendship and co-operation."

The rejection comes on the third day of Trudeau's government, leaving little reason for project advocates to lay the blame at his feet. It removes a key source of tension between the two countries amid ongoing talks over the Trans Pacific Partnership and emissions reduction, Canada's role in fighter-jet procurement and the fight against the Islamic State and other matters.

Obama's decision also comes weeks ahead of a climate summit in Paris where the Canadian prime minister plans to make new emissions-reduction pledges.

Brad Wall, the conservative premier of oil-producing Saskatchewan, criticized the move. "The U.S. administration chose to put political interests ahead of the economic and environmental benefits that KXL would provide, and ahead of it its relationship with its most important trading partner," he said in an emailed statement.

Trudeau had distanced himself from questions of the political fallout of any Keystone rejection. On Friday, he echoed comments made a day after his Oct. 19 election, when he said ties between the countries, which he aims to rebuild, are about more than "a single point of disagreement, a potential point of disagreement, a single pipeline."

The Keystone rejection gets Trudeau off the hook politically in that he won't be blamed for it and won't need to navigate opposition within his own centrist caucus, according to Duane Bratt, a political scientist at Mount Royal University in Calgary, the home of Canada's oil patch.

"This is going to be a blip" in relations, Bratt said by telephone. While Trudeau and his foreign minister, Stephane Dion, voiced support for Keystone, "people in Calgary didn't really believe a word they said. This gets them off the hook, and it also sets up nicely the environmental package, which was a big theme of the cabinet."

The impact of a rejection nonetheless cannot be ignored, according to Fen Hampson, an international affairs professor at Carleton University in Ottawa.

"It's a bit of a slap in the face to a new government, to a new prime minister who wants to change the tenor of the relationship with Washington," Hampson said by telephone. "Once again it shows the Obama administration puts domestic politics over bilateral relations with America's most important North American partner."

Stephen Harper, the former prime minister who ruled for nearly 10 years before Trudeau's victory last month, pushed hard for the project and at one point declared it a "no-brainer."

Obama "has always seen Keystone as a lightning rod for his environmental agenda, which is totally unfair to TransCanada," said Rob Merrifield, a former Canadian lawmaker who advocated for Keystone both as Harper's congressional liaison and as Alberta's representative in Washington.

Merrifield, now a consultant with the Edmonton-based Canadian Strategy Group, remains optimistic that Keystone will be pushed through by either Congress or another president.

"I believe this will eventually be built," Merrifield said by telephone. "I think he was going to do it over the summer but wanted to respect the election cycle in Canada, which is fine. Now he wanted to do it before Paris, because he's using this as a piece of his agenda on climate change."

While crude will continue to move across the border, the rejection underscores the larger shift toward environmental questions Canada will face about the oil sands at the upcoming Paris summit, said Anil Hira, a political scientist at Simon Fraser University in Burnaby, British Columbia.

"Part of it is a reflection of Canada's inability to understand U.S. politics," he said. "What's really going on is there's an environmental portion of the Democratic Party that's really railed against the oil sands for years."

Canada's Liberals, too, are stressing environmental concerns. The new government "will work hand-in-hand with provinces, territories and like-minded countries to combat climate change, adapt to its impacts, and create the clean jobs of tomorrow," Trudeau said in his statement.

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(With assistance from Greg Quinn and Theophilos Argitis in Ottawa.)