Minister 'cautiously optimistic' over Keystone decision, despite new signs of delay
By Jason Fekete and Sheldon Alberts,
Postmedia News November 9, 2011 4:07 PM
Source Vancouver Sun
Joe Oliver, Canadian Minister of Natural Resources. Photograph by: Todd Korol, Reuters
Natural Resources Minister Joe Oliver says he remains "cautiously optimistic" the Obama administration will eventually approve the Keystone XL project, despite new signals from the U.S. that the pipeline could be rerouted and a final ruling delayed until after the 2012 U.S. election.
As the fate of the controversial project hangs in the balance, Oliver also said there will be enough oilsands production from Alberta to simultaneously run both the Keystone XL and Northern Gateway pipelines to capacity. The latter would ship Alberta oilsands bitumen to British Columbia for export.
Serious questions remain, however, about whether the Keystone XL will be rerouted or if it will even be built.
Earlier this week, the U.S. State Department's inspector general announced a special investigation into the Obama administration's handling of the pipeline proposal.
U.S. officials, speaking on condition of anonymity, also said Wednesday the State Department is now considering whether to reroute the oilsands pipeline away from environmentally sensitive areas of Nebraska, which has become ground zero in the battle against the project.
A decision on whether to examine a new route — which would likely delay a final ruling on the project by potentially 12 to 18 months — could come within a few weeks, U.S. officials told Reuters and the Associated Press.
Mark Toner, a State Department spokesman, did little Wednesday to dampen speculation Keystone XL would be rerouted or delayed.
Asked repeatedly whether the administration is seriously considering an alternative route for the pipeline, Toner said all options remain "on the table."
The State Department's options also include outright denial of a presidential permit to allow construction of the 2,700-kilometre pipeline, he said.
"You know, we're looking at environmental issues, energy security, jobs and economic impact and foreign policy," Toner said. "So I would just say that all those issues within those subsets, I think, are on the table and being considered as we move forward."
A decision to require a new route for Keystone XL would amount to a major about-face for the State Department.
In its final environmental impact study, released in late August, the State Department said TransCanada's proposed route — which would cross the Ogallala Aquifer and Sand Hills ecosystem in Nebraska — was most feasible. The environmental study examined five alternative routes for Keystone XL in order to largely avoid the aquifer but found all would have "worse or similar" impacts on the environment.
The Keystone XL pipeline would carry up to 830,000 barrels of oil per day from Hardisty, Alta., to refineries on the Gulf Coast of Texas.
Oliver said Wednesday he recognizes there's mounting opposition to the pipeline and that it's a politically sensitive issue for the Obama administration.
However, he still believes the U.S. government will recognize the project is in America's national interest and allow it to proceed.
"We remain cautiously optimistic that the final decision will be that the project is in the U.S. national interest and it will go ahead," Oliver said. "We still expect that that will be the end result."
The minister said the Conservative government has been hoping a final decision on the project would be made by the end of the year, but that it respects the U.S. regulatory process.
Oliver said he has no indication that a final decision on the project will be punted until after the November 2012 U.S. election, as some observers in the United States now believe.
"There's always doomsayers. I'm continuing to believe that it will be decided well before (November 2012)."
Calgary-based TransCanada Corp. has warned an extended delay on a U.S. decision for the $7-billion pipeline could spook shippers and threaten the entire project.
The company said Wednesday it's still operating under the assumption the U.S. government will make a final decision on the project by the end of the year.
"All of these rumours are just that — rumours. We haven't been told otherwise from anybody at the State Department that anything is changing on our pipeline," said TransCanada spokesman Terry Cunha.
Rerouting the pipeline would result in a new environmental review process that could take years to complete and threaten the project if the company can't fulfil its obligation to have crude oil at refineries by 2013, Cunha said.
"Any type of delay on this proposal would have a significant impact with our customers and they're the ones who would have to decide if this is something they would want to continue to pursue," he said.
First announced in 2008, the project promises to create up to 20,000 new jobs, TransCanada says.
The U.S. State Department had previously promised to complete its review of the project by year's end, but has backed away from that commitment over the last week.
The latest developments come just days after an estimated 10,000 pipeline opponents protested at the White House, demanding President Barack Obama deny TransCanada a permit to build the oilsands pipeline.
Oliver acknowledged Wednesday that "certainly, the opposition is ratcheting up" against the pipeline, but he remains hopeful it will be approved.
The minister said he believes there's enough demand for oilsands crude in the coming years to simultaneously fill both the Keystone XL and Northern Gateway pipelines to capacity.
Enbridge's $5.5-billion, 1,172-kilometre Northern Gateway project would ship oilsands bitumen from northern Alberta to a marine facility in Kitimat, B.C., where oil would be unloaded onto tankers for export.
Canada currently produces approximately 2.9 million barrels of oil per day, with about 1.6 million barrels coming from the oilsands. However, total oilsands production is expected to more than double to 3.7 million barrels a day by 2025.
"Those two pipelines are not mutually exclusive," Oliver said. "We've got enough resources to feed both markets simultaneously . . . the numbers support it."
The Northern Gateway project is currently under review by the National Energy Board and the Canadian Environmental Assessment Agency.
Oliver figures a final decision on the project, which would carry an average of 525,000 barrels of petroleum per day, could come by spring 2013. The pipeline could be operational by 2017.
Chinese state-owned oil companies have invested billions of dollars in the Alberta oilsands and are increasingly eyeing the resource to feed the country's insatiable energy appetite. The minister said he's confident there will be plenty of demand from Asia, particularly China, to fill the pipeline.
National oil company China Petroleum & Chemical Corp. Ltd. — known as Sinopec — confirmed last year it was one of 10 partners putting up a total of $250 million toward the Northern Gateway pipeline.
"If we build it, they will come," Oliver said.
jfekete@postmedia.com
Twitter.com/jasonfekete
salberts@postmedia.com
Twitter.com/sheldonalberts
By Jason Fekete and Sheldon Alberts,
Postmedia News November 9, 2011 4:07 PM
Source Vancouver Sun
Natural Resources Minister Joe Oliver says he remains "cautiously optimistic" the Obama administration will eventually approve the Keystone XL project, despite new signals from the U.S. that the pipeline could be rerouted and a final ruling delayed until after the 2012 U.S. election.
As the fate of the controversial project hangs in the balance, Oliver also said there will be enough oilsands production from Alberta to simultaneously run both the Keystone XL and Northern Gateway pipelines to capacity. The latter would ship Alberta oilsands bitumen to British Columbia for export.
Serious questions remain, however, about whether the Keystone XL will be rerouted or if it will even be built.
Earlier this week, the U.S. State Department's inspector general announced a special investigation into the Obama administration's handling of the pipeline proposal.
U.S. officials, speaking on condition of anonymity, also said Wednesday the State Department is now considering whether to reroute the oilsands pipeline away from environmentally sensitive areas of Nebraska, which has become ground zero in the battle against the project.
A decision on whether to examine a new route — which would likely delay a final ruling on the project by potentially 12 to 18 months — could come within a few weeks, U.S. officials told Reuters and the Associated Press.
Mark Toner, a State Department spokesman, did little Wednesday to dampen speculation Keystone XL would be rerouted or delayed.
Asked repeatedly whether the administration is seriously considering an alternative route for the pipeline, Toner said all options remain "on the table."
The State Department's options also include outright denial of a presidential permit to allow construction of the 2,700-kilometre pipeline, he said.
"You know, we're looking at environmental issues, energy security, jobs and economic impact and foreign policy," Toner said. "So I would just say that all those issues within those subsets, I think, are on the table and being considered as we move forward."
A decision to require a new route for Keystone XL would amount to a major about-face for the State Department.
In its final environmental impact study, released in late August, the State Department said TransCanada's proposed route — which would cross the Ogallala Aquifer and Sand Hills ecosystem in Nebraska — was most feasible. The environmental study examined five alternative routes for Keystone XL in order to largely avoid the aquifer but found all would have "worse or similar" impacts on the environment.
The Keystone XL pipeline would carry up to 830,000 barrels of oil per day from Hardisty, Alta., to refineries on the Gulf Coast of Texas.
Oliver said Wednesday he recognizes there's mounting opposition to the pipeline and that it's a politically sensitive issue for the Obama administration.
However, he still believes the U.S. government will recognize the project is in America's national interest and allow it to proceed.
"We remain cautiously optimistic that the final decision will be that the project is in the U.S. national interest and it will go ahead," Oliver said. "We still expect that that will be the end result."
The minister said the Conservative government has been hoping a final decision on the project would be made by the end of the year, but that it respects the U.S. regulatory process.
Oliver said he has no indication that a final decision on the project will be punted until after the November 2012 U.S. election, as some observers in the United States now believe.
"There's always doomsayers. I'm continuing to believe that it will be decided well before (November 2012)."
Calgary-based TransCanada Corp. has warned an extended delay on a U.S. decision for the $7-billion pipeline could spook shippers and threaten the entire project.
The company said Wednesday it's still operating under the assumption the U.S. government will make a final decision on the project by the end of the year.
"All of these rumours are just that — rumours. We haven't been told otherwise from anybody at the State Department that anything is changing on our pipeline," said TransCanada spokesman Terry Cunha.
Rerouting the pipeline would result in a new environmental review process that could take years to complete and threaten the project if the company can't fulfil its obligation to have crude oil at refineries by 2013, Cunha said.
"Any type of delay on this proposal would have a significant impact with our customers and they're the ones who would have to decide if this is something they would want to continue to pursue," he said.
First announced in 2008, the project promises to create up to 20,000 new jobs, TransCanada says.
The U.S. State Department had previously promised to complete its review of the project by year's end, but has backed away from that commitment over the last week.
The latest developments come just days after an estimated 10,000 pipeline opponents protested at the White House, demanding President Barack Obama deny TransCanada a permit to build the oilsands pipeline.
Oliver acknowledged Wednesday that "certainly, the opposition is ratcheting up" against the pipeline, but he remains hopeful it will be approved.
The minister said he believes there's enough demand for oilsands crude in the coming years to simultaneously fill both the Keystone XL and Northern Gateway pipelines to capacity.
Enbridge's $5.5-billion, 1,172-kilometre Northern Gateway project would ship oilsands bitumen from northern Alberta to a marine facility in Kitimat, B.C., where oil would be unloaded onto tankers for export.
Canada currently produces approximately 2.9 million barrels of oil per day, with about 1.6 million barrels coming from the oilsands. However, total oilsands production is expected to more than double to 3.7 million barrels a day by 2025.
"Those two pipelines are not mutually exclusive," Oliver said. "We've got enough resources to feed both markets simultaneously . . . the numbers support it."
The Northern Gateway project is currently under review by the National Energy Board and the Canadian Environmental Assessment Agency.
Oliver figures a final decision on the project, which would carry an average of 525,000 barrels of petroleum per day, could come by spring 2013. The pipeline could be operational by 2017.
Chinese state-owned oil companies have invested billions of dollars in the Alberta oilsands and are increasingly eyeing the resource to feed the country's insatiable energy appetite. The minister said he's confident there will be plenty of demand from Asia, particularly China, to fill the pipeline.
National oil company China Petroleum & Chemical Corp. Ltd. — known as Sinopec — confirmed last year it was one of 10 partners putting up a total of $250 million toward the Northern Gateway pipeline.
"If we build it, they will come," Oliver said.
jfekete@postmedia.com
Twitter.com/jasonfekete
salberts@postmedia.com
Twitter.com/sheldonalberts
