Hillary Clinton says no to Keystone XL: Does it matter?

TransCanada'sKeystone XL pipeline has lost its last big Democratic supporter. After dodging questions onKXLand then trying to coax the Obama administration into finally making a decision, Hillary Clinton gave up waitingand announced that she is opposed to building the pipeline.

It's absolutely political, she must really be worried.- Michal Moore, University of Calgary

"I think it is imperative that we look at Keystone pipeline as what I believe it is," said Clinton. "Adistraction from the important work we have to do to combat climate change."

• Hillary Clinton opposes Keystone XL pipeline

• Keystone XL pipeline: Hillary Clinton pushes for decision

There's no question that this is political.

"It's absolutely political, she must really be worried," said Michal Moore, an expert on energy and environmental policy at the University of Calgary's School of Public Policy. "When the State Department was under her control, they were signalling all kinds of different outcomes."

Clinton had been inclined to approve

It had been widely expected that ifClinton winsthe presidency, she would approvethe pipeline. In 2010, while Clinton was still secretary of state, she said that she was inclined to support KXL, saying that it was either dirty oil from Mexico or dirty oil from Canada.

OK, that's not a rousing recommendation, but it was still viewed as a positive.

But now that the pipeline has no support from any major Democratic nominee for U.S. president, the question becomes: Does it matter?

The answer is no. At least for now.

"I think we've crossed over that line in the sand," said Robert Mark, an energy analyst with 3Macs. "This thing has been so delayed,TransCanada for so long didn't have a plan B and was fighting tooth and nail. But asit dragged on more and more, they moved to their plan B, which is [the] Energy East [pipeline]."

Marketdid what environmentalists couldn't

The goal of the environmental opposition to Keystone XL was to slow down the growth of Alberta's oilsands.

However, the industry simply found other ways to get oil to marketless efficient way, more expensive ways but the oil continued to trickle down to the U.S. refiners, by rail, and by more circuitous pipelines.

The amount of Canadian oil being refined atGulf Coast refiners the end point of Keystone XL hastripled since 2008, when TransCanada first announced the pipeline.

Butthe market ended up doingthe job the environmentalists could not. In June, the Canadian Association of Petroleum Producers (CAPP) cuts its forecast for oilsands growth over the next 25 years by30 per cent.

"We're able to move the amount we're generating out of the oilsands today," said Moore. "We're doing fine."

"It's the future capacity, that's an issue."

The energy industry will see this as a blow. The official position of CAPP is that all market access is needed, east, west and south, so that Canada can remain a player in the global oil market.

Alberta's rules could be changing

But the future growth of the oilsands remains in question. Capital investment is one part of the equation;the regulatory environment is the other.

When oil prices improve, will Alberta's NDP government be as keen to sell new oilsands leases? Will they be as likely to approve expansions and new projects? Will they promote bitumen leaving the province?

Alberta Premier Rachel Notley made the point just this week that she wants more bitumento be upgraded and refined in the province. In an interview with the CBC's Anna MariaTremonti, Notley said she didn't want Alberta's oil to be shipped to theU.S to be upgraded and refined.

"I'm not really in the business of creating jobs in the Gulf Coast. I care about creating job for Albertans."

What's next?

The future of Keystone XL now depends on the next U.S. presidentialelection. The Obama administration has hinted that it will make a call on the pipelinebefore the end of its term in 2016. If that does happen, the answer will almost certainly be no.

But that does leave the door open for TransCanadato simply reapply under the next administration. After all, the Republican front-runner, Donald Trump,has said he's in favour of the pipeline.