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Republican election gains likely a boon for Alberta oil sands

The historic Republican gains in the U.S. midterm elections appear set to clean up Alberta's American image as a producer of dirty oil.

There is zero chance of a new climate change legislation in the United States in the next two years following a vote Tuesday that saw the Democrats lose control in the House of Representatives and suffer significant setbacks in the Senate.

That gives the Harper government some significant breathing space after co-ordinating its environmental efforts with the Obama administration before tabling its own detailed climate change plan.

The biggest winners in Canada after Tuesday night's U.S. midterms are Alberta's oil producers — branded by many Democrats as purveyors of "dirty oil."

Canada watchers on both sides of the U.S. political divide agreed Wednesday that the Tea Party-driven protest vote across the United States would reap political dividends for the oilsands.

"I think the playing field for Canadian energy will be a little more level now. There will always be the environmental attacks," said Republican David Wilkins, the Bush administration's last ambassador to Ottawa.

"But I think whether you are talking about oilsands, whether you are talking about pipelines, I think the rhetoric will be a little bit less."

Democrat Gordon Giffin, who was Bill Clinton's last Canadian envoy in the late 1990s, said the new Congressional make-up will help to "moderate" debate in the U.S. on energy and environmental issues.

"I think the probabilities of there being any significant changes in U.S. policy, be it legislative or regulatory that would uniquely disadvantage the oilsands — I think the probabilities of that occurring have gone down," Giffin said.

"In that respect, it's probably good for the Canada-U.S. dynamic."

Colin Robertson, a former Canadian diplomat who served in Washington, said special interests groups will still keep up their lobbying efforts against "dirty oil" while the Obama administration tries to tackle the issue through federal regulations rather than getting Congress to pass new laws.

But he added: "Climate change legislation is dead for now and this puts back into the box the border levy on 'dirty oil.'"

Environmental groups weren't ready to throw in the towel, pointing out that Democrats who oppose the oilsands would still be writing letters to President Barack Obama.

Danielle Droitsch, director of U.S. policy for Alberta's Pembina Institute, said Prime Minister Stephen Harper will do further damage to Canada's reputation on the environment if he simply shelves its climate change plans.

"We hope that this election doesn't give Harper cover to continue not acting on climate," said Droitsch.

Liberal Leader Michael Ignatieff predicted the Harper government will use congressional gridlock as an excuse to continue doing nothing to combat climate change.

"One of the persistent excuses of the Harper government for doing nothing on climate change, nothing on the environment, is to say, 'We've got to wait for Washington.'"

NDP Leader Jack Layton said Harper is probably privately pleased that so many "climate change deniers" were elected.

Wilkins noted that Republicans would soon assume leadership of key Congressional committees, meaning the end of California Democrat Henry Waxman's chairmanship of the influential House Energy and Commerce Committee.

Waxman championed tough legislation that would have penalized oilsands crude and he also opposed Secretary of State Hillary Clinton's endorsement of the Keystone XL pipeline that would link Alberta oil to the U.S. Gulf Coast.

"No matter how U.S. politics might change or don't change, Canadian oil and gas is a critical element of their energy mix. They consume 19 million barrels of oil a day and we are their largest supplier," said Travis Davies, a spokesman for the Canadian Association of Petroleum Producers.

Wilkins said more emphasis would now be placed on energy security in the U.S., diminishing reliance on less stable Middle East and Persian Gulf supplies.

"The administration I worked for clearly understood that Canada is an integral part of North America energy security. Every ounce of oil we receive from Canada is one less we have to receive from parts of the world that aren't as friendly to us."

Both Wilkins and Giffin agreed more Republicans in Congress means freer trade and less protectionism.

"There's less chance of Buy American clauses, amendments being tacked on to bills," said Wilkins, adding that the influence of unions and special interests would be diminished in trade matters.

Giffin agreed that his fellow Democrats tend to be more skeptical of free trade, but the influence of the Tea Party movement in the Republican Party means nothing is cut and dried anymore.

"A lot of the so called Tea Party members or subscribers — and as a result some of the people who were elected as Republicans — are skeptical of free trade," said Giffin.

"The Tea Party component of the Republican Party is a variable that none of us know including the Republican leadership."

Beyond the environment and trade, Giffin said Tuesday's results won't fundamentally alter relations between Ottawa and Washington but questions still remain.

"I don't think our leaders have figured out what to make of it yet either. I sure wouldn't be trying to expect others outside the country to figure it out."

For more from the Canadian Press, click here, or scroll down the Tyee's main page.

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