U.S. demand for Canadian oil will continue: natural resources minister

3/4/2013

While demand for oil imports in the U.S. is projected to decline, Canada’s natural resource minister says our southern neighbours will continue to rely on oil from other countries.

A report by the U.S. State Department released last week suggests that that the proposed Keystone XL pipeline won't boost oilsands growth in Alberta and contribute to further climate change.

However, the report also notes that demand for oil imports in the U.S. will continue to decline, raising the question of whether Americans will need Canadian oil.

Canada is the largest source of U.S. oil imports, accounting for 25 per cent of the total in 2011.

Natural Resource Minister Joe Oliver told CTV’s Question Period on Sunday that he’s confident the U.S. will continue to import oil in the long term.

“You can make the decision to take oil from some other countries like Venezuela and Mexico that have heavy crude coming in, or some other countries that may not be particularly reliable as sources of energy,” Oliver said.

“Or you can deal with your best friend and closest neighbour who has a robust environmental protection regime and is friendly and has a long relationship with supplying oil to the U.S.”

In the 2,000-page report released Friday, the state department noted that the pipeline doesn’t pose any greater risk to the environment than other modes of transporting oil across North America.

Oliver said he was pleased with the state department’s environmental and safety assessment of the Keystone project.

The $7-billion project has drawn harsh criticism from environmental groups in Canada and the U.S. However, the Conservative government, along with the premiers of Alberta and Saskatchewan, have stressed that the megaproject will create thousands of jobs in both countries.

In recent weeks, both U.S. President Barack Obama and Secretary of State John Kerry have publically addressed the need to combat climate change, which have added to increasing speculation that the White House may reject the project.

Oliver maintained that both Canadians and Americans share the same “overarching objective of reducing greenhouse gas emissions.”

“We’ve done a number of things that are, frankly, ahead of the Americans in terms of, for example, dealing with coal emissions, which is a much bigger emitter of emissions than the oilsands are,” he said.

The Keystone pipeline would transport crude oil from Alberta through Saskatchewan and six U.S. states to Texas refineries on the Gulf Coast.

Last year, Obama rejected TransCanada's original permit application for the pipeline, saying a rushed deadline set by congressional Republicans did not give lawmakers enough time to properly review the proposal.

Concerns were also raised about the pipeline’s presence in environmentally sensitive areas of Nebraska, so TransCanada submitted another application with a different route, which was approved by Nebraska Gov. Dave Heineman earlier this year.

Now, it’s up to Obama to approve or deny the Calgary-based company’s revised Keystone XL plan.

But first, there will be a 45-day public input period, during which Americans and Canadians will be able to have their say on the pipeline, either at public meetings or by sending emails and letters to the U.S. State Department.

Officials stressed that they are looking at the project “very objectively” and that’s why the department’s draft environmental assessment does not endorse or reject the pipeline. A final report will be done after the public hearings.

(CTV)