* Will push tar sands crude as ethical and safe
* Ottawa fights EU bid to label oils sands crude as dirty
* Opposition to proposed Pacific pipeline is growing
By David Ljunggren, Randall Palmer and Jeffrey Jones
OTTAWA/CALGARY, Nov 10 Canada will keep
promoting crude from the tar sands of northern Alberta as a
secure source of energy despite a U.S. decision to delay
approval of a pipeline to carry the oil from Alberta to Texas,
officials said on Thursday.
The Canadian government and the oil industry have limited
options, however, as another controversial proposal to build a
pipeline to export tar sands crude to Asian markets is just at
the beginning of a lengthy review process.
The U.S. move to put off a decision on TransCanada Corp's proposed $7 billion Keystone XL pipeline for 18 months
is a significant blow for Ottawa, which has strongly backed the
"While we are disappointed with the delay, we remain
hopeful the project will be decided on its merits and
eventually approved," Natural Resources Minister Joe Oliver
said in a statement e-mailed to Reuters.
"In the meantime, our government will continue to promote
Canada, and the oil sands, as a stable, secure, and ethical
source of energy for the world."
The right-leaning Conservative government - which garners
much of its support from Western Canada and is a firm supporter
of the oil and gas industry - says the United States is better
off buying oil from Canada, a neighboring stable democracy,
than from other suppliers.
It has also touted the thousands of jobs that building the
pipeline would create in Canada and the United States. Prime
Minister Stephen Harper had referred to a U.S. approval as a
Washington's decision to delay approval, which could end up
killing the project, followed a campaign by protesters who
complain oil sands crude is particularly energy intensive to
extract, creating huge carbon emissions. They also point to a
possible environmental disaster if the pipeline broke.
Keystone XL is one of two projects that oil sands producers
have been counting on to increase financial returns by
delivering to markets other than the oversupplied U.S. Midwest.
Canada currently exports about 2 million barrels of oil a day,
almost all of it to the United States.
NORTHERN GATEWAY NOW IN FOCUS
Focus now turns to Enbridge Inc's C$5.5 billion
($5.4 billion) Northern Gateway pipeline across the Rocky
Mountains to Canada's Pacific Coast, where more than half a
million barrels of crude a day could be loaded onto tankers and
shipped to Asia.
"(There's) obviously growing energy demand in Asia as the
economies continue to grow, and Canada will be looking for a
buyer," said Sara MacIntyre, a spokeswoman for Harper.
Asked whether the Keystone delay might accelerate efforts
to look for Pacific markets for tar sands crude, she told
reporters: "It could be part of the discussions."
However, that project is anything but a sure thing. More
than 3,000 people have registered to be heard at National
Energy Board hearings on the Northern Gateway proposal, which
are due to start in January.
The project faces stiff opposition from environmentalists
and several native groups, which have said they would not want
the pipeline crossing their land under any conditions, and the
Keystone XL experience may embolden critics.
Alberta Premier Alison Redford, whose province garners a
third of its revenue from oil sands and other fossil fuels,
said she was disappointed with the U.S. move, but declined to
say if she and her officials would be more forceful in pushing
for Northern Gateway as that review unfolds.
"It's important that, as that develops, we are having a
public conversation and a policy conversation," said Redford,
who is scheduled to travel to Washington next week. "Is it
enough? It's important and it's something that is the role of
the premier ... and it is the role of the government of Alberta
to ensure that our perspective is at the table."
Canada is already involved in a lengthy battle with the
European Union over the bloc's plans to classify tar sands
crude as particularly dirty. Ottawa fears this could limit
future markets for the oil.
Rick Smith of the Environmental Defence group said the U.S.
Keystone announcement has sent an important message.
"There is no such thing as 'business as usual' for the tar
sands industry ... the longer Canada delays getting serious
about reining in tar sands pollution and transitioning to a
clean energy economy, the more of this type of controversy we
should expect," he said in a statement.