UPDATE 1-Key US lawmaker opposes Canadian oil sands pipeline

Tue Jul 6, 2010 5:59pm EDT

Related Topics

   * Proposed pipeline would transport 510,000 bpd of crude
 * Project would undermine climate change agenda-Waxman
 * TransCanada says blocking project hurts energy security
(Recasts, adds comments from TransCanada, oil and
environmental groups)
 By Ayesha Rascoe and Scott Haggett
 WASHINGTON, July 6 (Reuters) -  A key U.S. lawmaker has
called on the government to block a TransCanada (TRP.TO)
pipeline designed to supply U.S. refineries with Canada's oil
sands crude, arguing the "dirtiest" fuel undermined efforts to
battle global warming.
 Henry Waxman, chairman of the House Energy and Commerce
committee, urged the State Department to block TransCanada's
planned Keystone XL pipeline.
 "This pipeline is a multibillion-dollar investment to
expand our reliance on the dirtiest source of transportation
fuel currently available," Waxman said in a letter to the
 Canada's oil sands, the largest source of crude outside the
Middle East, are developed using open pit mines and processing
plants that spew carbon.
 Since Waxman  heads an influential committee, the Obama
administration must pay attention to his stance.
 "His letter is very significant and represents a major
change in that the Obama administration now has to declare in a
more public way whether it's going to begin taking steps now to
break our oil addiction," said Kenny Bruno, U.S. coordinator of
the No Tar Sands Oil campaign.
 Despite a pledge to lower greenhouse gas emissions, the
administration has not yet taken steps to crack down on oil
sands imports, a stable fuel source from a friendly neighbor.
 Last year, the administration approved a similar pipeline
project transporting oil sands by Enbridge Inc (ENB.TO).
 The proposed $7 billion Keystone XL pipeline would greatly
increase U.S. imports of oil sands crude, raising the carbon
intensity of the nation's transportation fuels, Waxman said.
 Oil sands proponents note the Canadian crude is replacing
declining volumes of Mexican and Venezuelan heavy oil.
 "Waxman probably doesn't recognize that the oil coming from
Canada is coming in to fill a void that's left by similar heavy
oil," said Greg Stringham, vice-president of the Canadian
Association of Petroleum Producers. "It's just going into
existing refineries that were using similar oil."
 Keystone XL would carry 510,000 barrels a day of crude from
Hardisty, Alberta to the Gulf Coast refining hub. Construction
of the line is expected to be completed in 2013.
 TransCanada said the pipeline project had already been
vetted, and blocking it would deprive the United States of oil
that would still be developed for sale elsewhere.
 "Denying the Keystone XL pipeline project won't stop oil
sands development," Terry Cunha, a company spokesman said in an
email. "It will only deprive the U.S. of the energy security benefits and send oil sands production to other markets."
 Last month, a letter signed by around 50 other House
lawmakers raised concerns with the State Department about the
pipeline. Bruno said congressional scrutiny will ensure the
administration can't make a "quiet" decision as it did with
Enbridge's Alberta Clipper line.
 Waxman also raised concerns the department is not
adequately assessing the climate change impact of the Keystone
XL and the decision-making process is not transparent enough.
  (Reporting by Ayesha Rascoe; Editing by David Gregorio)