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Will new head of Environmental Protection Agency bode badly for Keystone XL?

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WASHINGTON - U.S. President Barack Obama is poised to nominate his "green quarterback," a longtime air quality expert who has been a champion for tougher carbon emissions standards, as head of the powerful Environmental Protection Agency.

Gina McCarthy, who currently heads the EPA's Office of Air and Radiation, reportedly has the inside track to replace Lisa Jackson, who officially stepped down from the agency last week.

The 58-year-old McCarthy's ascension proves the president is serious about battling climate change, observers say, and certainly isn't expected to help clear the path for TransCanada's proposed Keystone XL pipeline.

"Her nomination signals that the president really wants to deliver on his State of the Union objectives to take serious action on climate change," Daniel Fiorina, director of the Center for Enviromental Policy at American University, said Thursday.

"I wouldn't say this changes the dynamics of the Keystone decision significantly — there are other considerations that are paramount — but she knows air and climate issues very well and she's a very strong environmentalist."

The EPA is one of several federal agencies advising the Obama administration on the $7-billion pipeline, a project that would carry millions of barrels of bitumen a week from Alberta’s carbon-intensive oilsands to the U.S. Gulf Coast.

Environmentalists have nicknamed McCarthy, an Irish Catholic from Massachusetts, Obama's green quarterback after she spent much of his first term writing and rolling out power-plant emissions regulations, angering lawmakers from coal-rich jurisdictions and participating in testy congressional hearings.

One Republican senator has already fired a warning shot about McCarthy, suggesting her nomination — which could come as early as next week — won't be a cakewalk.

David Vitter of Louisiana recently complained that McCarthy has failed to respond to his requests for information about the science behind the agency's regulations. The Supreme Court has ruled the EPA can and must act on greenhouse gas emissions under the country’s Clean Air Act, giving it powers not enjoyed by other federal agencies.

"I want to know who will respond to my outstanding request of one year and nine months regarding the scientific methods used to base the EPA’s regulatory agenda," Vitter said in a statement last week.

"Assistant administrator McCarthy is directly responsible for these concerns, and the failure to respond is not a good sign.... The administration should be looking for someone who will end the standard of ignoring congressional requests, undermining transparency and relying on flawed science."

Along with McCarthy, Obama is also reportedly set to nominate nuclear physicist Ernest Moniz to head the Department of Energy.

Unlike McCarthy's nomination, talk of Moniz has angered environmentalists since he's a natural gas proponent whose energy research group at the Massachusetts Institute of Technology is funded by some of the world's largest fossil fuel companies.

"His appointment to the DOE could set renewable energy development back years," said a statement released by Food and Water Watch.

As head of the EPA, meantime, McCarthy will get the type of rough ride that's customary on Capitol Hill given the agency oversees hot-button issues — climate change and environmental regulations, for instance — that bitterly divide lawmakers. It's a thankless job recently likened to "javelin-catching."

Even before any official nomination, Sen. Roy Blunt of Missouri has threatened to stall Obama's pick because of his concerns about a stalled flood control project in his state. Blunt has accused the EPA of "outrageous" efforts to thwart the levee.

McCarthy, who once worked as an environmental official in Mitt Romney's administration when he was governor of Massachusetts, reportedly possesses a quick sense of humour and has fans even among oil and coal industry lobbyists.

She therefore shouldn't have a problem dealing with the onslaught of criticism from legislators that comes with the job as chief of the EPA, Fiorino said.

"She has a reputation for being able to talk to people and for consulting broadly," he said. "You want someone at the head of the agency who can take a balanced look at contentious issues, and that's Gina McCarthy."

Chris Sands, an expert on Canada-U.S. relations and North American economic integration, agrees.

"Gina McCarthy has a reputation for industry outreach and that has actually benefited Canada in a specific case: the new auto emissions rules, which she not only designed with US industry input but co-ordinated with Ottawa so that the new rules affected the shared industry in a seamless way," he said.

"Calgary isn't going to love someone Obama picks as EPA administrator, but McCarthy isn't the worst, or impossible to deal with. Her background as a regulator in Connecticut and Massachusetts could suggest she'd be a friend of Canadian hydroelectricity."

Under Jackson's tenure at the EPA, however, the agency was far from Keystone-friendly — and Jackson and McCarthy are close associates.

In July 2010, as TransCanada awaited a decision from the White House on the pipeline, the EPA sent a letter to the State Department calling its draft environmental assessment of the project “inadequate.”

It chastised analysts for failing to address the greenhouse gas emissions associated with Keystone XL. The letter also urged the State Department to further examine pipeline safety and spill-response planning, as well as the impact on Canadian native communities.

Obama rejected the pipeline early last year, but invited TransCanada to file a new application with an altered route that would skirt Nebraska’s ecologically sensitive Sand Hills region.

TransCanada did so, and is now awaiting word on approval from the State Department after getting the all-clear from the state of Nebraska.

There are growing concerns among Keystone proponents in the U.S. capital, however, that Obama may insist on something in return for approving the pipeline, including a carbon levy imposed at the border. That could significantly increase the costs of importing oilsands bitumen into the United States.

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