Hello Stephen, this is Barack, I’m Cancelling Keystone

So began this year’s crisis management exercise for my public administration students. I always start our discussion of crisis management and government communications by giving the students an exercise. This year’s exercise imagined that President Obama, responding to environmentalist pressure, decides to cancel the Keystone XL pipeline and announce his decision on Earth Day, Monday, April 22, 2013.

As a courtesy, he calls Prime Minister Harper on Sunday night, adding that in his announcement he will describe Keystone “as a defining climate change decision for a generation” and that “by saying no to Keystone, we are taking a stand for an economy that will make less use of fossil fuels, that will expand use of renewable energy, and that will put a priority on preventing further global warming.”

The exercise asks the students to put themselves in Harper’s shoes and indicate what he should immediately say to President Obama over the phone and what he should say to the Canadian people the next day.

After discussing Harper’s response, the exercise asks the students to divide into three groups to prepare public responses to Obama’s decision by Russ Girling, President of Transcanada Corporation, as well as Opposition Leader Thomas Mulcair and newly-elected Liberal leader Justin Trudeau (the latter, an easy prediction). A little twist in the second assignment is that Prime Minister Harper has called Girling Sunday night to tip him off, but that Mulcair and Trudeau hear about the decision only when Obama announces it on Monday morning, and are being pressed by the media for an instant reaction to scrums outside their office doors.

I won’t attempt to lay out detailed answers but here are some suggestions for an overall approach.

In Harper’s case, the challenge for the phone call is to keep calm and not express the anger, disappointment, and surprise (at the speed of the decision) he must certainly feel. The question portrays Obama, by explaining how he will present his decision to the American people, as lecturing the Prime Minister. While Harper might well take umbrage at the lecture and suggest that Obama’s environmentalism is cynical given America’s continued heavy use of coal, responding to a lecture with a tit-for-tat debating point does nothing to enhance their relationship.

Harper’s public statement – one student suggested waiting until the day after Earth Day when the media would give him more attention – should combine a small measure of regret about Obama’s decision, an affirmation of the government’s policy of continued development of the oil sands in an environmentally responsible way, and a commitment to pursue other options, such as speeding the review process for the Northern Gateway pipeline to facilitate selling the oil on Asian markets, or developing pipelines in Canada that would allow the oil to satisfy the eastern Canadian market and be refined, possibly for export, in eastern Canadian refineries.

Given how controversial Keystone has become (something I demonstrated by giving the students the New York Times editorial of March 10 about Keystone entitled “When to Say No”), Harper should be having both the PMO and PCO hard at work on contingency planning.

Russ Girling’s challenge will be to convince capital markets that he hasn’t bet the company on Keystone and that Transcanada has many other profitable options. Given the market’s inevitable focus on Transcanada’s stock price, when trading resumes after the announcement, it would be a good idea for Girling to appear with his chief financial officer, who can field more detailed questions about the company’s plans. This would be a clear instance of the double-headed public face of the organization, Girling to outline the big picture, and the CFO to fill in the details. For Transcanada as well, contingency planning is in order.

Mulcair and Trudeau face the same challenge, except that Trudeau is a newbie, having been Leader of the Opposition for only a week. Both will want to criticize Harper for his over-reliance on one economic option as well as his lack of concern about the environment. The media will press both as to whether they favour any of the government’s Plan B options, such as Northern Gateway or new or enhanced pipelines to Eastern Canada. Neither will want to make a commitment of such consequence in a scrum, and both will want to change the topic to strengthening the environmental review process.

These scenarios will not play out on Earth Day, because the period for public response to the State Department’s draft environmental impact analysis of Keystone will not have concluded by then and Obama would be very unlikely to act before State has presented its final analysis. But the end game appears to be coming soon, and Canadian politicians, corporations, and public interest groups should be doing their own contingency planning.


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