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Tue, 12 Mar 2013 14:15:00 GMT | By Deirdre McMurdy, MSN Money

How Chávez's death will affect the Keystone campaign

The turmoil brought about by Hugo Chávez’s death will serve Canadian oil interests.

Deirdre McMurdy

Within hours of Prime Minister Stephen Harper’s official statement on the death of Hugo Chávez, the government of Venezuela issued a formal complaint about its “blunt and categorical” tone, its “insensitive and impertinent” content “at a time when the Venezuelan people are grieving and crying.”

But even though Harper has been criticized in the past for a certain lack of personal warmth, its absence in the statement has nothing to do with emotion and everything to do with the geopolitical chess game.

The words that gave such offence were very carefully chosen and emphasized the hope for Venezuela’s “brighter future based on the principles of freedom, democracy, the rule of law and respect for human rights.”

For one thing, it was closely aligned with the tone of U.S. President Barack Obama’s statement, something that’s important given that the late President Chávez had publicly dismissed Obama as a “clown” and “an embarrassment.”

Just like Prime Minister Harper — or vice versa —Obama declared, among other things, that “the United States remains committed to policies that promote democratic principles, the rule of law, and respect for human rights.”

So what’s the big deal? Well, a lot of it comes down to the intense lobbying that’s going on over the future of the proposed Keystone pipeline.

President Chávez died just days after the U.S. State Department accepted a third-party environmental assessment of the controversial $7-billion oil pipeline from northern Alberta to the U.S. Gulf Coast.

It wasn’t exactly a ringing endorsement, but it did acknowledge that whether the pipeline proceeds or not, it’s not going to have a major impact on climate change, an issue upon which Obama has vowed to focus.

With the door opened by a crack, a whole lot of Canadians are putting their shoulders to it, determined to push it open all the way. Lobbying by the federal government, the government of Alberta, the energy industry and its suppliers has ramped up aggressively. In fact, it’s estimated that as much as $200 million has already been spent by those trying to get Keystone approved.

Canada’s single most aggressive selling point in this campaign for approval of Keystone is that the oil it carries comes from a stable, democratic, environmentally accountable nation.

Currently, U.S. refiners import over a million barrels a day of oil from Venezuela, making it only second to Canada on the list of foreign oil suppliers.

In making the case for Keystone, however, it’s in Canada’s interest to emphasize the risk inherent in any reliance on Venezuela and its uncertain political future.

Canada’s oil patch proponents — as well as federal and provincial governments — are making much of the fact that by any international measure Canada has empirically high regulatory standards for oil production and transportation. Furthermore, our orderly, established political process ensures that there’s a negligible chance of revolution, upheaval or other disruptions in supply flow.

Plus, Canadians are nice. Our leader doesn’t call their leader mean names. At least not publicly.

Relations between the U.S. and Venezuela are so fraught, they haven’t exchanged ambassadors since 2010.  Venezuela’s close connection to Cuba and dictator Fidel Castro has only added to the tension.

Just before Chávez died, two U.S. officials were expelled from Venezuela, charged with attempts to destabilize the country. In a country where conspiracy theories have been a bit of a national pastime, Venezuelan Vice-President Nicolas Maduro implied that America was behind the cancer that eventually claimed Chávez's life.

Because Maduro is Chávez’s choice as a successor, he’s expected to be the leading candidate in the election that’s supposed to be called in the next 30 days. He’s not likely to reverse 15 years of anti-American dogma — especially since it’s proven to be so popular with the poorest — and potentially most volatile — Venezuelans.

A common enemy like the U.S. is also useful in terms of holding disparate socio-economic groups together and maintaining a unifying focus.

Even if the opposition party manages to eke out a victory in Venezuela, it’s not likely to improve the appeal of dealing with Venezuela: the country’s army has already said it wouldn’t accept such an outcome.

Another contributing factor to uncertainty is that it’s unclear who will be running the state oil company — or how.

Of course, as Canada’s Keystone lobby brigades fan out across the U.S. over the next few weeks, none of this is likely to be stated explicitly. After all, Harper’s muted, formal statement has pretty much said it all.

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