Keystone XL rejection criticized in Calgary as pure politicking

Oilpatch observers were notsurprised to see U.S.President Barack Obamareject the Keystone XL pipeline project Friday, a move many described aspurely political.

"It's just symbolism to pick on the oil sands and to make President Obama look good as he goes off to [the 2015 United Nations Climate Change Conference in]Paris," saidBob Skinner, anexecutive fellow at the University of Calgary'sSchool of Public Policy.

• Notley disappointed Obama called Alberta oil 'dirty' while rejecting Keystone pipeline

Skinner said the amount of greenhouse gas emissions that would be directly attributable to the proposed pipeline project and any relatedoil extraction is "absolutely trivial" in the grand scheme of global emissions.

He also took issue with Obama's close relations withChina on climate change.

• U.S., China agree to cut greenhouse gases in bid to spur others to join

"China increases its carbon emissions by an amount almost equal to total Alberta emissions every year," Skinner said.

"Soit really is hard to take his embrace of scientific reasoning seriously."

Alberta's emissions totaledapproximately 267 megatonnesin 2013, according to Environment Canada, which accounted for 36.8 per cent of Canada's total emissions.

'Feel-good project for environmentalists'

Bob Schulz, a professor at the Universityof Calgary'sHaskayne School of Business, said rejecting Keystone was primarily a "feel-good project for the environmentalists" and a plank forObama as he tries to establish hislegacy.

"His motivations are trying to set a baseline for his personal legacy and to have the environmentalists feel happy," Schulz said.

"Meanwhile, the oil companies are still going to ship the oil by rail."

Dirk Lever, managing director ofAltaCorp Capital, agreed, saying the rejection of Keystone XL could turn out tobe beneficial for Canadian rail companies.

"If crude can't go by pipeline, thendown the road,if volumes pick up and there's further activity, they'll be using rail," Lever said.

"One guy's misfortune is another guy's opportunity."

What's next?

Schulz expects TransCanada will now bide its time, while investing capital it would have put into Keystone XL into other projects like gas-fired power plants, until the 2016 presidential election.

If a Republicancandidatewins the White House,SchulzsaidTransCanadawill likely re-apply for the major pipeline that would carry bitumen from Alberta to Texas.

"If the Democrats win, well, then it's probably not going to go at all," he said.

Lever said the Keystone XL project isn't totally dead but is effectively "on hold," something that could change if a more pipeline-friendly administration gains power in the United States.

"It's not just like the Americans are picking on Canada," he said."There are U.S.-based pipeline companies that are having a lot of trouble just building new pipelines anywhere in the U.S."

For its part, TransCanada said it's not giving up.

"TransCanadaand its shippers remain absolutely committed to building this important energy infrastructure project," CEORuss Girling said in a statement.

"We will review our options to potentially file a new application for border-crossing authority to ship our customer's crude oil, and will now analyze the stated rationale for the denial."