Obama’s Keystone Denial Prompts Canada to Look to China Sales

[Dave]

I think its a mistake not to do this pipeline. Obama likes shovel ready jobs and this pipeline deal is about as shovel ready as its gonna get anytime soon. To simply reject it because the environmental analysis isn't done is stupid... that testing should of been started as soon as the new layout of the pipeline was announced. Instead its cost Americans a lot of well paying jobs just so the president can play politics... pretty sad!

President Barack Obama’s decision yesterday to reject a permit for TransCanada Corp.’s Keystone XL oil pipeline may prompt Canada to turn to China for oil exports.

Prime Minister Stephen Harper, in a telephone call yesterday, told Obama “Canada will continue to work to diversify its energy exports,” according to details provided by Harper’s office. Canadian Natural Resource Minister Joe Oliver said relying less on the U.S. would help strengthen the country’s “financial security.”

The “decision by the Obama administration underlines the importance of diversifying and expanding our markets, including the growing Asian market,” Oliver told reporters in Ottawa.

Currently, 99 percent of Canada’s crude exports go to the U.S., a figure that Harper wants to reduce in his bid to make Canada a “superpower” in global energy markets.

Canada accounts for more than 90 percent of all proven reserves outside the Organization of Petroleum Exporting Countries, according to data compiled in the BP Statistical Review of World Energy. Most of Canada’s crude is produced from oil-sands deposits in the landlocked province of Alberta, where output is expected to double over the next eight years, according to the Canadian Association of Petroleum Producers.

“I am sure that if the oil sands production is not used in the United States, they will be used in other countries,” Fatih Birol, chief economist at the International Energy Agency, said in an interview before a speech at Imperial College in London today.

‘Profound Disappointment’

Harper “expressed his profound disappointment with the news,” according to the statement, which added that Obama told Harper the rejection was not based on the project’s merit and that the company is free to re-apply.

Canada this month began hearings on a proposed pipeline by Enbridge Inc. to move crude from Alberta’s oil sands to British Columbia’s coast, where it could be shipped to Asian markets.

Environmentalists and Canadian opposition lawmakers welcomed the Obama administration’s decision. Megan Leslie, a lawmaker for the opposition New Democratic Party, said the Keystone pipeline project was harmful to Canada’s energy security.

“What I’m opposed to is continuing the unchecked expansion of the oil sands,” Leslie said by telephone.

New Flashpoint

Enbridge’s pipeline may now become the new flashpoint between Harper and the opposition. Harper has said building the capacity to sell the country’s oil to Asian markets is in the national interest, and the government will review regulatory- approval rules for new energy projects so they can be done more quickly. Harper has also said he will look more closely into complaints that “foreign money” is being used to overload the regulatory process.

“We have to have processes in Canada that come to a decision in a reasonable amount of time, and processes that cannot be hijacked,” Harper said at a press conference Jan. 6 in Edmonton.

The Keystone decision is the latest of several U.S. moves that have irked Canadian policy makers. Canada objected to “Buy American” provisions in the Obama administration’s $447 billion jobs bill that was blocked by Republicans in Congress, as well as the restoration of a $5.50 fee on Canadian travelers arriving in the U.S. by plane or ship.

Approval of Keystone is a “no-brainer,” Harper said in a Sept. 21 interview with Bloomberg.

Cornerstone of Development

Yesterday’s rejection “certainly introduces new uncertainties into the economic relationship,” said David Pumphrey, deputy director of the energy and national security program at the Center for Strategic and International Studies in Washington. “This is a cornerstone of economic development for the country.”

The denial came before a Feb. 21 deadline set by Congress after Obama postponed a decision in November. TransCanada said the 1,661-mile (2,673-kilometer) project would carry 700,000 barrels of crude a day from Alberta’s oil sands to refineries on the U.S. Gulf coast, crossing six U.S. states and creating 20,000 jobs.

“I’m disappointed that Republicans in Congress forced this decision, but it does not change my administration’s commitment to American-made energy,” Obama said today in a statement. “We will continue to look for new ways to partner with the oil and gas industry to increase our energy security.”

Canadian policy makers said they remain optimistic TransCanada will eventually be able to proceed.

Still Supporting

Alberta Premier Alison Redford said in a press conference in Edmonton that it is still “entirely possible” the pipeline will be built and said it was good news that TransCanada planned to apply again.

Canada will continue to support TransCanada Corp. (TRP)’s plans to build the Keystone XL pipeline, Canadian Foreign Minister John Baird said, adding that it is in the best interests of both Canada and the United States.

“We strongly believe that Keystone’s in the best interests of both countries,” he said. “We’ll continue to be an active supporter of the project.”

To contact the reporters on this story: Theophilos Argitis in Ottawa at [e-mail]; Jeremy van Loon in Calgary at [e-mail]

To contact the editors responsible for this story: Chris Wellisz at [e-mail]; David Scanlan at [e-mail]

http://www.bloomberg.com/news/2012-01-19/canada-pledges-to-sell-oil...

[Dave]

And judging by the number of pipelines available, I hardly think one more is going to make a difference.

[Sweater Cows!]

agreed!

[XLFD]

Probably not, but an official rebuff by the current administration, could lose us some oil supply in the future from a reliable source, and hence increase prices. 

[Dave]

And something else to consider, by nixing this pipeline deal, Obama may contribute to global warming/cooling/climate change. Here's how, if the oil goes to China which is how its looking, it gets refined there and of course they don't fall under the same environmental laws that we do so pretty much they can do about anything they want with the oil.. I'll just bet their methods of refining oil are not anywhere near as safe for the environment then ours is.

[Willy]

On the flip side of the issue I've read articles that say the pipeline will divert oil from the midwest because that oil will be put into the Keystone pipeline which connects Canada  to the Gulf which is a freetrade zone and all of the oil will be destined for foreign markets. Because of this, oil prices in the midwest will increase. Another issue is that the pipelines now connecting the US to Canada are nowhere near filled to capacity so the argument that another pipeline is needed to handle additional oil is incorrect.I personally don't care if another pipeline is installed because there are 1.9 million miles of energy pipelines already. I just don't want the US citizens to be played as fools in a pawn game between Governments and the oil industry, especially if it's going to cost us in the end. One thing I would be concerned about is the fact that the pipline would pass through one of the largest aquifers which serves 2 million people with drinking water.

[Dave]

Something to consider when wondering if the decision to not do the pipeline was political or not..... a plan had already been approved that would of went over a more environmentally sensitive area by the State Department. An altered route shouldn't be a big deal... Obama simply didn't want to tick off any of his environmental minded voters I think... although in the end he ticked off some of the unions.

[easymoney]

Two things to consider

The pipeline would not have cost US taxpayers one dime, done by private enterprise.

And, closer to election, it would make good press for the pos to OK it. Good for votes.

The whole thing was approved BACK IN 2009 and has been sitting on O's desk since he was elected, but, hasn't had time to do anything with it???BS

It's all politics