Canada toughens tone on Keystone approval

HOUSTON Mon Oct 31, 2011 3:29pm EDT

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HOUSTON (Reuters) - Canada is toughening its tone on the Keystone XL pipeline, warning the Obama administration that rejection of TransCanada Corp's $7 billion project could prompt Ottawa to concentrate on selling its oil-sands-derived crude to Asian customers instead.

"What will happen if there wasn't approval -- and we think there will be -- is that we'll simply have to intensify our efforts to sell the oil elsewhere," Joe Oliver, Canada's natural resources minister, told Reuters on Monday.

In the face of rising environmental opposition to the planned pipeline, which would carry 700,000 barrels per day of supply from Canada's oil sands projects to refineries on the U.S. Gulf Coast, the Obama administration has signaled that it may miss a year-end target for approval.

Oliver said a delay by the Obama administration would not be fatal to the project, and that TransCanada has multiple options -- including customers in Asia.

"It may be other parts of the United States, it may be a rerouted pipeline, and then, of course, there's Asia," Oliver said in an interview.

The increasingly heated debate pits environmental groups and some politicians raising fears over ecological destruction against other lawmakers and TransCanada, who say the project will create jobs and bolster energy security.

"While we still hope to make a decision by the end of the year, we are first and foremost committed to a thorough, transparent and rigorous review process," a U.S. official said last week on condition of anonymity.

The ruling falls to the State Department because the line crosses national borders. The decision has already been pushed back once.

Following Environmental Protection Agency complaints about its initial analysis, the State Department said it would undertake a supplemental review.


Oliver said delay or disapproval of the U.S. segment would not change the fact that Canada is "a global energy superpower" with 174 billion barrels of oil reserves, the vast bulk of it in the oil sands of northern Alberta.

He argued that thousands of miles of oil and gas pipelines already cross the Ogallala aquifer, the focus of environmental concern, and that Keystone would have more safeguards and newer technology than all of them.

He noted Enbridge Inc has proposed a $5.6 billion pipeline from northern Alberta to Canada's Pacific Coast to export oil to Asia, and regulatory approval is a year or a year and a half away.

That proposal is also controversial. Several native groups in British Columbia have said they will not support the line crossing their lands under any circumstances.

"What we want to do in respect to Asia, that objective is not mutually exclusive with the Keystone pipeline. We have a lot of oil and we want to get it to welcoming markets and open markets," Oliver said.

"And there are also possibilities of moving it east as well. We just have to look at the whole picture. But there would be a delay, and that wouldn't be positive for either country in our view," he said.

There have been no private assurances between the U.S. and Canadian governments that the pipeline will be approved, although analysts have suggested the Obama administration will eventually back the project.

(Additional reporting by Arshad Mohammed in Washington, editing by Chris Baltimore and Dale Hudson)

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Comments (9)
Alexander_Sr wrote:
That’s really and idle threat but one that might work.

Oct 31, 2011 2:34pm EDT  --  Report as abuse
SeattleSteve wrote:
>>> That’s really and idle threat but one that might work.

Even though the eco-wacks are giving Obama a hard time with their little protests, they WILL UNDOUBTEDLY vote for him next election. So their ultimatum about the pipeline to Obama is TRULY an “idle threat”. Environmentalists have become a joke and political-pushover, which is why Obama has been ignoring their antics as they prance around in front of the White House in Polar Bear suits getting arrested.

Furthermore, it’s obvious that Obama cares not about the Chinese having “an edge” on America in petroleum use. From Obama’s point of view — overseeing the decline of America’s power in the world — he feels America’s “chicken’s have come home to roost” and “deserves it”.

However, the thing that should keep Obama awake at night is that he’s about to lose the support of as many as 15 million Union members (including the AFL-CIO, Teamsters, LiUNA, etc) who want the pipeline for its JOBS, Tax revenue and Union Dues.

Unions have warned him publicly and privately that he must authorize the pipeline’s construction and fight any court delays, or he will lose Union help on the campaign trail and with campaign donations.

So in the end, even if he needs to send Michelle, Sasha and Malia along the route of the pipeline with picks and shovels to dig that ditch themselves, Barack Obama will ensure that pipeline is built.

Oct 31, 2011 3:17pm EDT  --  Report as abuse
MikeBee wrote:
Fine, let them refine the oil shale in Canada and ship it to the Orient. It was to be refined in Texas and sold to South America anyway. The Canadian company itself has reported that when complete the pipline will cause gas prices in the midwest to increase by 20 cents a gal.

Keystone’s last pipeline, build with steel from India, was said to leak once in 7 years. So far in one year they have had 11 leaks. The pipeline in the US will be build with the same steel from India.

It is time to be investing in renewables, not climate changing fossil fuels. Oh, by the way, did you hear about the extreme weather event on the US east coast? How many more before we wake up?

Oct 31, 2011 7:14pm EDT  --  Report as abuse
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