Canada confident US will approve oil pipeline


Associated Press

Posted on October 13, 2011 at 3:00 PM

Updated Thursday, Oct 13 at 4:02 PM

TORONTO (AP) — Canada's natural resources minister said Thursday he is confident the Obama administration will approve a Canadian company's plan to build a massive oil pipeline from western Canada to the Gulf Coast despite "noise" from environmental opposition groups.

Minister Joe Oliver said Thursday the pipeline is more likely to be approved since the State Department recently released its positive final Environmental Impact Statement.

Oliver said the Canadian government is making strides in lobbying U.S. officials.

"In spite of the noise, we are making significant headway in conveying the considerable advantages of Keystone to the U.S in terms energy security, jobs and economic growth," Oliver said.

Calgary-based TransCanada wants to build the $7 billion Keystone XL pipeline to carry crude oil extracted from the oil sands in Alberta, Canada, to refineries in Houston and Port Arthur, Texas. The underground pipeline would carry an estimated 700,000 barrels of oil a day, doubling the capacity of an existing pipeline from Canada.

The project has become a flashpoint for environmental groups, who say it would will bring "dirty oil" that requires huge amounts of energy to extract and could cause an ecological disaster in case of a spill.

Environmental activists, including actress Daryl Hannah and NASA scientist James Hansen, have been arrested in ongoing protests outside the White House. But the Obama administration appears likely to back the 1,700-mile (2,735-kilometer) pipeline.

Oliver said Alberta's oil sands represent just 0.1 percent of total global emissions, an amount equal to the emissions produced by coal-fired plants in the state of Wisconsin. He also said oil sands emissions have declined 30 percent over the past 15 years.

"The total impact is not going to destroy the planet, as some would argue," Oliver said at a breakfast meeting of the Toronto Board of Trade.

Oliver later told reporters he doubted opposition to the pipeline is representative of the U.S. population. He said not everyone can be convinced of its merits. "There are some people who are utterly committed to opposing any form of hydrocarbon development and I don't know whether any fact will change their mind," Oliver said.

Danielle Droitsch, Canada Project Director of the Natural Resources Defense Council, said the pipeline would have the carbon footprint of 6 million more cars on the road.

"But the opposition to the pipeline isn't just about the pipeline's climate impacts. Americans have serious concerns about routing the pipeline through their water supply, particularly given TransCanada's poor safety record with their first Keystone pipeline," Droitsch said.

In Nebraska, the pipeline has drawn opposition from a coalition of farmers, ranchers, landowners, environmental groups and other activists who fear it will leak and contaminate the Ogallala aquifer, which supplies drinking and irrigation water to eight states.

The State Department has authority over the project because it crosses the border. U.S. officials are reviewing testimony from the hearings and public comments submitted to the department's website and are expected to make a recommendation by the end of the year.

Oliver said it will create 20,000 construction jobs immediately in the U.S. and will reduce U.S. dependence on Middle Eastern oil.

He said it would create over 140,000 additional jobs per year in Canada and over $600 billion more in economic activity over the next 25 years.

Oliver called Canada an emerging energy superpower because of the oil sands. He said Canadians stand to benefit enormously and said it must be developed. Alberta has the world's third largest oil reserves, more than 170 billion barrels. Daily production of 1.5 million barrels from the oil sands is expected to nearly triple to 3.7 million in 2025. Overall, Alberta has more oil than Russia or Iran. Only Saudi Arabia and Venezuela have more.

"Our long-term supply of oil is critical in a world where supply risks are growing, due to unstable geopolitics, declining production and uncertainties in key oil-producing regions," Oliver said. "On the other hand, demand for oil in countries like China and India is growing rapidly. So the opportunities are immense, but to achieve our full potential we have to make major investments in infrastructure."

Oliver has also previously said Canada needs Enbridge's proposed Northern Gateway pipeline to the Pacific coast to be built so that it can diversify its energy exports to Asia. The Northern Gateway Project would connect Alberta's oil sands oil to a port on the coast of British Columbia, where tankers could transport it to Asian customers.

The project is undergoing a regulatory review. Aboriginal and environmental opposition to the Pacific pipeline is also fierce.

"The U.S. is basically our only customer. Tapping international markets is also essential as we continue to grow our status as a global energy superpower," Oliver said.