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  • Canada: U.S. Delaying Pipelines Means We'll Go Elsewhere

    Canada exports almost all of its energy to the United States, but because of resistance from the Obama Administration to approving the construction of the Keystone XL pipeline, that could soon change. Canadian Prime Minister Stephen Harper told President Obama that as the U.S. delays, Canada will begin diversifying by shipping its oil to Asian markets. Harper said of the delay:

    This highlights why Canada must increase its efforts to ensure it can supply its energy outside the U.S. and into Asia in particular. Canada will step up its efforts in that regard and I communicated that clearly to the president.

    The Keystone XL pipeline, which would run 1,700 miles from Alberta, Canada to the Gulf coast, would bring an additional 700,000 to 830,000 barrels of oil to the United States per day. Environmental protestors are trying to block construction because of their opposition to fossil fuels, especially coming from tar sands, because oil from tar sands emits more greenhouse gases (GHGs)—although the incremental impact of increased GHGs is not as large as environmentalists purport it to be. The Administration said it would make a decision by the end of the year and was weighing the push from labor unions to approve the pipeline versus the push from environmental activists to shut it down. President Obama ultimately punted, delaying the decision until after the 2012 election.

    It would be foolish to think that delaying the pipeline or not constructing it entirely meant that Canadian oil would sit in the ground. With China’s rapid economic growth, it’s no surprise that that country would welcome the opportunity to import more oil from Canada. In fact, Canadian Natural Resource Minister Joe Oliver said China was “very eager” to get oil from Canada.

    As my colleague David Kreutzer wrote back in May:

    Block the XL pipeline if you think the environment will be better served by shipping Canadian oil an extra 6,000 miles across the Pacific in oil-consuming super tankers and then refining it in less-regulated Chinese refineries. In addition, be aware that replacing the Canadian oil means the U.S. also must import more oil by tankers, which are less efficient than pipelines.

    Another concern for environmentalists has been the route of the pipeline, particularly in Nebraska’s Sand Hills region, because it runs over the Ogallala water aquifer. TransCanada Corp., the firm behind the construction of the pipeline, said it would work with the state of Nebraska to examine rerouting the pipeline, despite the fact the U.S. Department of State conducted a thorough environmental review and concluded that the pipeline poses few environmental risks. In fact, just a few days ago, TransCanada spokesman James Millar told National Journal that “a delay doesn’t make sense. This has been an exhaustive, 39-month review, the longest review ever for a cross-border crude-oil pipeline in the United States. There is no new information to come forward. There is no reason not to make a decision.”

    Even though TransCanada is working with Nebraska to reroute the pipeline, a decision won’t come any sooner. Rerouting the pipeline means another Department of State environmental impact statement, and the whole process would take until the first quarter of 2013 at the earliest.

    We’re still going to need jobs in 2013, but we could really use them in 2012.

    Posted in Energy, Featured [slideshow_deploy]

    11 Responses to Canada: U.S. Delaying Pipelines Means We'll Go Elsewhere

    1. steverocknroll says:

      It is clear that Obama is continuing his pattern of voting 'present'. His biggest problem is that 2 of his largest voting blocks, the Environmentalists and the Unions, are on opposite sides of this issue. Hence, since he is easily THE most co-dependent president we've ever had, whichever way he ultimately decides, SOMEone's gonna be mad at him, and in BO's emotionally dysfunctional world, EVERYone MUST love him. Therefore, he'll do nothing, then blame Canada for jumping the gun, not waiting for him to make up his mind, whatever. This is Obama's way – do nothing, then blame someone else.

    2. I think the most important factor is the national security issue. Here we have a way to safely diversify the sources for crude oil to a North American partner. One hiccup from that region and we pay a hefty premium, or don't get enough supply at all. In addition, I would much rather we send these dollars to Canada than to some potentially explosive continent. What is Obama thinking? Oh yeah, I forgot. He prefers to import more from South America…

    3. Bobbie says:

      Canada offered in good faith, obama declined in favor of his own. Americans who aren't represented by the President doesn't believe in being held back with no substantive, rational reason, so why should Canada let the President of America hold Canada back?

    4. allen says:

      Does the Keystone Pipeline go thru the Bakken oil field in ND.? if it does what a plus for our Oil Refineries. This President has no common sense and when Obama thinks that Hawaii is in ASIA, you can understand what DUMB is all about. When the American people replace him we will start to Heal. History will not be kind to this man.

      • Bobbie says:

        he did it to himself by his chosen acts. but really? did he really think his "home?" state Hawaii is in Asia? oh my goodness, this country is being run by a dangerous, criminal clown! what's a high IQ for a clown? 50?

    5. David P says:

      This is one of those administration decisions that is difficult to analyze, but any analysis is troubling.

      It really should be a no-brainer for the State Department to approve the Keystone XL pipeline. There are already pipelines crossing the U.S.-Canada border, none of which that are as well-engineered or will be as well-constructed as the Keystone XL. The environmental impact studies have been done and have passed muster. It would create immediate construction jobs and help stabilize additional upstream and downstream permanent jobs. It would be a show of good faith to a friendly neighbor, Canada. It would reduce our dependence on Middle East oil and expedite development of oil fields in North Dakota, Montana and other Bakken Shale producing states. The unions support it. The pipeline transfer of oil from Canada for refining in the U.S. is the most environmentally responsible manner by which this oil can be shipped out of Canada. It is the best result for the global environment, about which Obama and his cohorts profess to care so much.

      No, there is something more at play here. It's almost as if he does not want private sector jobs to be created. It's almost as if he wants continued 99% vs. 1% rhetoric to remain on the front burner. It's almost as if he is trying to keep unrest and divisiveness as the prevailing American political atmosphere as we go into the election year. It's almost as if he is playing his base against itself–angering the greens by shelving the new EPA rules on air pollution but giving in on Keystone; angering the unions by giving in on Keystone but allowing his NLRB to sue Boeing. But why?

      I don't know. I think back to the reported conversation Harold Hamm, the CEO of Continental Resources (Enid, OK), had with Obama at the White House. After Hamm told him the U.S. had enough natural gas and oil within our borders to "replace OPEC," Obama dismissed him by saying oil and gas will only be necessary for a couple of years, but after that the U.S. will go to all alternative and green energy. That doesn't make sense on any level.

      Does he think Washington can usurp the power of the free market and literally run Exxon Mobil, Conoco-Phillips, and countless thousands of independent oil and gas companies out of business merely because they are in a business that is disfavored by this administration? Those companies won't quit drilling, producing, refining and selling petroleum products unless someone makes it literally unfeasible or illegal for them to do so. Is that the end game? Is the Keystone decision a move in that direction?

      I think also of the Kansas Department of Health and the Environment's decision several years ago to unilaterally scrap an expansion of a coal-fired electrical plant in western Kansas. The applicant, Sunflower Energy, had received all necessary permits from the KDHE staff after years of negotiations and was set to proceed with the expansion. Then-Governor Kathleen Sebelius (now HHS Secretary) had her KDHE Director invoke an emergency power to deny the permits at the last second, notwithstanding that the emergency power was intended to be used in, well, emergency situations where public health was in imminent danger. Sunflower had to start over and the plant is still not built, much to the chagrin of the good people of western Kansas who could use the jobs. Its subsequent attempts to get permitting and approvals has been bogged down in controversy and lawsuits and may never get resolved.

      If a company can satisfy all legal and regulatory requirements but still not be able to build its plant because it is politically unpopular, then what does that say about this administration's (or its proxies like state regulators') respect for the rule of law? Is this a manner by which the administration intends to restrict, then shut down, fossil fuel companies?

      I realize I've digressed from the point, but it is a troublesome turn of events when viewed in the context of the President's comment to Mr. Hamm and the action taken by Ms. Sebelius while Kansas governor. I think the battle against the domestic oil, gas, coal, and other fossil fuel industries by our progressive political class is about to get worse. This Keystone decision might be the tip of the iceberg.

      • Glinda C says:

        Americans need to understand the impact of an oil spill in the Ogalalla Aquifer, the area is seismic and what will the quality of the oil be. How much of the oil will be going to China and how much is China investing to have oil diverted across our precious lands to fuel their needs? I'm not against American jobs but I don't want to sell our American souls for oil. I'm using the internet to LEARN about these issues before politicking the issues and these are real and serious issues.

    6. Laura says:

      Out of all the idiotic things that have come out of this "administration?" besides Obamacare, this ranks right up there in ruining our great country. But, that is what he wants, along with his demon friends. What a Blight to have this man for "our?" President. And I am just a kind-hearted little old lady.

    7. Terri R says:

      David P. I agree with you. But I remember Obama told Brazos that we would be glad to be their best customer after he (we) gave Sorros 1 billion to invest in Brazos. I think this president would rather we get our oil from Brazil instead of Canada.

    8. Glinda C says:

      Every one should research tar sand oil and I'm sure no one would want any part of it. It's a dirty product that will impact land, waterways and the air we breath. Let Canada ruin their environment for profit we have enough stressors in this country form other sources.

    9. art wissing says:

      let me know when the world uses less energy the next day,than it has the day before,i want to mark my calender……oil,natural gas,coal ,are proven to work , 24/7 365 for decades and we will all need that for decades to come. they are cheap, abundant, and right here in our own country or near by a freindly country,canada. this a no brainer . we are the country with the most oil, gas, coal in the world. yet we do not use it, we would rather buy it from another country, why? because we still need the energy,just because we buy it from some one else,does t mean we need less of it….

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