OTTAWA—The federal government says it will renew efforts to ship Canadian oil to Asian markets after the White House rejected plans for a $7 billion pipeline to move Alberta crude into the U.S.
Prime Minister Stephen Harper told Barack Obama in a phone call Wednesday he was “profoundly disappointed” with the U.S. decision on the Keystone XL project and pointedly said that Canada would seek other markets for its energy exports.
Soon after the two leaders spoke, Obama made public his decision to deny the application by Canadian energy giant TransCanada Corp. to build the pipeline, citing a “rushed and arbitrary deadline” imposed by Congress to review the project.
“This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people,” Obama said in a statement.
The $7 billion pipeline would have run 3,134 kilometres from Alberta across six states, carrying half a million barrels of oil sands crude a day to Texas refineries.
Environmentalists, who oppose development of the Alberta oil sands and had raised concerns about the pipeline’s routing across sensitive Nebraska lands, praised the decision.
Those lands, known as the Sand Hills, had emerged as a flashpoint for opposition to the pipeline among opponents who feared a pipeline breach would foul the terrain and the shallow water tables below.
However, the U.S. administration left the door open for TransCanada to submit another application to address those concerns.
In its own statement, the company said it remained “fully committed” to the project and said it would reapply in hopes of getting approval that would allow the pipeline to be up and running by 2014.
Natural Resources Minister Joe Oliver expressed optimism the pipeline will eventually be built, citing its economic benefits and promise of energy security for the U.S.
“The process is not yet over and we are hopeful this project will be approved in the future based on its merits,” he said.
But the U.S. decision appears to have strengthened Canada’s resolve to find other buyers for its energy, notably Japan and China, where Harper is scheduled to visit next month.
“We basically have currently one customer for our energy exports,” Oliver said Wednesday, noting that 99 per cent of Canada’s oil exports go to the U.S.
“That customer has said it doesn’t want to expand at the moment so it certainly intensifies the broad strategic objective of the government to diversify our markets to Asia,” he said.
“We want to diversify our market, China wants to diversity its sources of supply. They are hungry for our energy. They are growing at an extremely rapid rate. They are the biggest consumers of energy in the entire world,” he said.
That was echoed by Alberta Premier Alison Redford, who said the province will now pursue access to “alternative markets.
“Today’s decision also reinforces the need for a Canadian energy strategy and why Alberta must focus on market diversification with a clear aim to Asia-Pacific,” Redford said.
But moving oil to Asian markets will require construction of a controversial pipeline in this country —snaking west from Alberta to the B.C. coast to deliver it to tankers for shipment abroad.
Like the Keystone pipeline debate, plans for the so-called Northern Gateway are already stirring similar arguments that pit environmental worries against big promises of jobs and investments.
Oliver said “responsible development” of the oil sands means thousands of jobs investment and tax revenues that fund services such as education and health care.
He said the “financial security” of Canadians rests on expanding markets for that oil.
With files from Petti Fong in Vancouver
Link to original article from TheStar.com