New route could derail US Keystone XL pipeline

Significance The Keystone XL extension is a major new proposed oil pipeline project, with implications for US-Canada trade (at a time of uncertainty surrounding NAFTA negotiations), Canadian oil producers, and the global oil market. Its prospects suffered a blow in November when Nebraska state regulators rejected the pipeline builder TransCanada’s preferred route, opting instead for a lengthier path through the state. Impacts Nebraska’s economy could lose out on millions of dollars in revenue if Keystone XL does not go ahead. US President Donald Trump could be hurt politically if a project that he so publicly backed falls through. Canadian Prime Minister Justin Trudeau faces provincial and local opposition to new pipeline projects.

Significance Canada’s Liberal Prime Minister Justin Trudeau is preparing to welcome a more predictable and stable partner in Biden than outgoing Republican President Donald Trump. However, Biden is also expected quickly to cancel the Keystone XL pipeline, cutting another lifeline to Canada’s oil industry and creating some strain in Canada-US ties. Impacts Improved Canada-US ties will persist even if Trudeau loses the next federal election to Conservative Erin O’Toole. Canada will re-engage militarily with UN peacekeeping and NATO deployments. Trudeau will encourage Biden to end US prosecution of Meng Wanzhou, allowing Canada to release her; Biden may agree. Canada’s border with the United States will open in stages as COVID-19 recedes. Ottawa will push Biden to end ‘Buy American’ procurement policies, with little success.


Subject Military influence in Pakistan. Significance Army Chief Qamar Javed Bajwa earlier this month visited Beijing to reassure China about Pakistan’s commitment to the China-Pakistan Economic Corridor (CPEC). Pakistan’s military strongly influences the country’s policy. It is widely believed that Prime Minister Imran Khan had the military’s support in winning the July general election. Impacts Any meeting between Khan and US President Donald Trump is likely to be uncomfortable, further straining Pakistan-US ties. Pakistan will strongly defend its commitment to CPEC. The state will increase harassment of political opponents and civil society critics.


Headline US/CANADA: Keystone XL pipeline project is abandoned


Headline US/CANADA: Obama is likely to block Keystone project


Significance The assassination follows months of political turmoil and rising gang violence and comes just weeks before elections, scheduled for September 26. Interim Prime Minister Claude Joseph, who has taken charge of the country, said yesterday that measures were being taken “to guarantee the continuity of the state and to protect the nation". Impacts Further political assassinations would exacerbate unrest. The Dominican Republic has closed its border, fearing a migrant surge; the situation will bolster public support there for a border wall. The UN Security Council meets today and may authorise emergency action in Haiti; any substantial redeployment, however, would take time.


Significance However, the departure of former US President Donald Trump -- who was an enthusiastic supporter of Brexit and UK Prime Minister Boris Johnson -- has made this harder to achieve. Impacts Johnson will consider holding a snap election in 2023 to capitalise on the successful vaccination campaign and economic reopening. The failure to conclude a US-UK FTA would increase the prospects of an EU-UK veterinary agreement. Without a UK-EU veterinary agreement, the chances of persistent disruption on trade between Great Britain and Northern Ireland will grow.


Significance National and state leaders of his Democratic Party had been pressing Cuomo to resign since last week’s publication of a report from State Attorney-General Letitia James detailing his sexual harassment of eleven women, including state employees. Cuomo’s impeachment by the state legislature was looking all but certain by the time he resigned. Impacts Prosecutors in five New York State counties will continue to pursue separate criminal investigations despite Cuomo’s resignation. The State Assembly may complete the impeachment process, despite Cuomo’s resignation, in order to prevent him from running again. Cuomo will continue to talk up his liberal polices, his opposition to Donald Trump, and his leadership during the pandemic.


Subject The sale of the Erdenet mine. Significance The day before parliamentary elections in June last year, Prime Minister Saikhanbileg Chimed announced the sale of 49% of shares held by the Russian government in the Erdenet Mining Corporation and the Mongolrostsvetmet mining company to Mongolia Copper Corporation, an unknown private Mongolian company. Subsequent parliamentary inquiry concluded that the sale was unconstitutional and the government ordered the shares transferred to the state on February 16 this year. The government’s actions received wide public support while polls reveal that the electorate views corruption as the main obstacle to Mongolia’s development Impacts Talk of 'nationalisation' in the Western media threatens to derail Mongolia's efforts to fix its image and attract foreign investors. The unusual circumstances of the sale raise suspicions of corruption and collusion between Mongolia's previous government and largest bank. The new government's will to scrutinise sale demonstrates the strength of Mongolia’s democracy.


Significance The Pakistan Muslim League-Nawaz (PML-N)’s five-year term ended on May 31. PML-N President Shehbaz Sharif faces a tough fight to become prime minister, with the main challenge set to come from Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) and further opposition provided by Bilawal Bhutto Zardari’s Pakistan Peoples Party (PPP). Impacts With Khan as prime minister, the military would likely have free rein to pursue an anti-India foreign policy. Khan would step up his criticisms of the war in Afghanistan and likely have a difficult relationship with US President Donald Trump. Pakistan under any government will pursue balanced diplomacy in the Middle East, seeking good ties with both Saudi Arabia and Iran.


Subject Impact of old and new sanctions on Russia's oil industry Significance New US sanctions make it harder for President Donald Trump to relax or reverse sanctions on Russia's energy sector but do not radically change existing restrictions. The Russian oil industry has responded since 2014 by seeking alternative sources of capital. Gas firms have been targeted less by restrictions, although the new US bill singles out Gazprom's Nord Stream 2 project for potential punitive action. Impacts Sanctions will not affect Russia's current position as the world's top oil producer. Long-term production will be depressed if ageing fields cannot be replaced with new fields requiring high-tech development. Kazakhstan is keen to stress that the oil pipeline from its Tengiz field to the Russian Black Sea is exempt from sanctions.


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