Saskatchewan leader urges Obama to approve Keystone XL pipeline

CALGARY, Alberta Thu Jan 17, 2013 6:34pm EST

Saskatchewan Premier Brad Wall looks on before speaking to the economic community in Toronto October 29, 2010. REUTERS/Mark Blinch

Saskatchewan Premier Brad Wall looks on before speaking to the economic community in Toronto October 29, 2010.

Credit: Reuters/Mark Blinch

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CALGARY, Alberta (Reuters) - The premier of Saskatchewan led 10 U.S. state governors on Thursday in urging President Barack Obama to approve TransCanada Corp's contentious and long-delayed Keystone XL oil pipeline, citing energy-security benefits in both countries.

Saskatchewan does not have the massive oil sands resources that neighboring Alberta does and which would move in large volumes to the southern United States in the proposed $5.3 billion conduit. But it does have some of the Bakken light oil reserves that would also be shipped.

"The energy relationship between the United States and Canada is vital to the future of both our countries. It is an interest we share, transcending political lines and geographic boundaries," Saskatchewan Premier Brad Wall said in a letter to Obama.

Wall pointed out that U.S. oil imports from Canada could reach 4 million barrels a day in seven years, twice the amount now imported from the Gulf region of the Middle East.

"The Keystone XL Pipeline could also provide the critical infrastructure required to transport growing U.S. domestic production from the Bakken shale region to market," Wall wrote.

The governors of Arizona, Idaho, Kansas, Nevada, North Dakota, South Dakota, Oklahoma, Texas, Utah and Wyoming, all Republicans, were also signatories to the letter to Obama supporting the project, which would move more than 800,000 barrels of oil a day to southern Nebraska from Canada.

A decision by the State Department on whether to approve the pipeline is expected by the end of the first quarter, though some analysts expect that timing to slip.

TransCanada faces staunch opposition from environmentalists, who warn of the increased risk of oil spills. On Thursday, The Natural Resources Defense Council, Pembina Institute and others pressed their case in Washington by saying the project would foster increased oil sands development in Alberta and surging carbon emissions.

Obama rejected TransCanada's application last year, saying it must stake out a new route around the environmentally sensitive Sandhills region of Nebraska. TransCanada resubmitted its application last spring.

The $2.3 billion southern section of the project, between Oklahoma and Texas, is already under construction as it did not require a presidential permit.

Absent from the list of governors was Dave Heineman, the Republican leader of Nebraska. His state's environmental regulator recently issued an assessment on the new path that said Keystone would have little impact on a major aquifer and that any spill cleanup would be paid for by TransCanada.

Heineman is expected to decide soon whether to approve the new route.

Among environmental groups pressing for rejection, Oil Change International said emissions from a byproduct of refining oil sands, known as petroleum coke, have so far been unaccounted for. Petcoke can be burned like coal by utilities.

Most previous assessments of emissions linked to oil sands have not examined emissions from burning the substance, the group said. The Oil Change report said the fuel emits 5 percent to 10 percent more carbon dioxide than does coal.

Concern about climate change has increased after a series of extreme weather events last year, including Hurricane Sandy, widespread drought and the warmest year on record in the United States.

Representative Henry Waxman, the top Democrat on the House Energy and Commerce Committee, said Keystone should be stopped.

"We know that climate change is happening now, we have to fight it now, and we must say no to this pollution pipeline now," Waxman said in a release

Alberta Premier Alison Redford, whose provincial coffers are highly dependent on oil exports, said Obama's administration was already fully aware of her position supporting Keystone XL.

(Reporting by Jeff Jones; Additional reporting by Timothy Gardner in Washington; Editing by Steve Orlofsky)

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