President Obama?s latest smug comments on the Keystone XL oil sands pipeline suggest the Canadian project?s odds of being approved under his watch are waning.
As Obama ponders fate of Keystone XL, 37 U.S. pipeline projects are planned or under way
President Barack Obama may or may not approve the Keystone XL pipeline, but it seems like the oil will continue to flow across North America.
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Thankfully, Canada hasn?t stood still while the U.S. President dithered.
So many new pipeline options have emerged that Keystone XL?s relevance is diminishing as each one gains momentum.
Sure, it will be hard to fill Keystone XL?s void and promise over the short term ? perhaps a couple of years around 2016 and 2017 until new pipeline options are up and running.
But over the long-term, Canada is better off fast-tracking oil market diversification to global markets that are not beholden to U.S. anti-oil interests and that remain very motivated to buy Canadian supplies.
Two all-Canadian options ? TransCanada?s Energy East project from Alberta to New Brunswick, and pipelines from Alberta to the West Coast ? made big leaps forward in the past few days.
On Friday, TransCanada, the Keystone XL proponent, said it?s optimistic about its Energy East project, involving a conversion to oil service of its gas Mainline that could start delivering Alberta oil as far as New Brunswick in 2018. TransCanada said it plans to finalize agreements with prospective shippers in the next two weeks. Energy East would single-handedly replace Keystone XL, which would not be ready to move oil until 2016 even if approved by the end of the year.
Also on Friday, Alberta?s Alison Redford and British Columbia?s Christy Clark announced after the premiers? annual meeting in Niagara-on-the-Lake that they would work together to ?build new markets and get the highest price possible for the resources owned by the people of our two provinces.?
It?s a huge step forward to resolve the two provinces? differences over bitumen pipelines to the West Coast and achieve a fairer distribution of risk and benefits. Enbridge Inc.?s proposed Northern Gateway pipeline would deliver 525,000 b/d of Alberta oil to Kitimat by around 2017, and Kinder Morgan?s TransMountain pipeline expansion would deliver an additional 590,000 b/d of Alberta oil to Vancouver by around 2017.
?Alison and I have been having this [discussion] together as premiers,? Ms. Clark said. ?We want to take the next concrete step in that journey and have our officials sit down and start really grinding through some of the details to find out where we can find common ground, where we disagree and where we need to try to work a little harder.?
Meanwhile, Enbridge, Canada?s top pipeliner of oil to the United States, has been quietly expanding its system to boost Canadian oil exports by one million barrels a day by mid-2015, from nearly two million b/d it transports today.
Some of Enbridge?s major initiatives:?eliminating bottlenecks to boost capacity by an additional 300,000 b/d of heavy crude to refineries in the Chicago area by the end of this year; twinning its Spearhead and Seaway pipelines to transport an additional 600,000 b/d to the U.S. Gulf Coast by mid-2014; reversing its Line 9 to transport 300,000 b/d of Canadian oil to Quebec refineries by the third quarter of 2014.
?Beyond these commercially secured projects, we also have initiative underway that will allow us to provide market access to another 1.5 million b/d,? spokesman Graham White said in an email. They include: The conversion to oil of its natural gas Trunkline to the Louisiana refining market; and the expansion of its Flanagan South/Seaway systems to provide even more access to Houston/Port Arthur refining markets.
Of course, Canada?s options don?t end with pipelines, as the build-up in oil-by-rail traffic demonstrates.
It all makes the U.S. President?s weekend remarks in the New York Times look like he hasn?t considered Keystone XL beyond the environmental lobby?s cheat sheets.
In an interview with the newspaper, Barack Obama called into question the project?s job creation potential, maintained most of the oil would be exported, argued it might increase prices in the Midwest, and urged Canada to do more about carbon pollution from the ?tar sands? ? all talking points advanced by the anti-oil sands lobby that have been refuted by Canadian governments, the North American oil industry, TransCanada, the union movement, many members of the U.S. Congress (including Democrats), and his own State Department.
As the Washington Post put it: ?For those trying to decipher which way President Obama is leaning on whether to grant the Keystone XL pipeline a presidential permit, the comments he made ? suggest he accepts much of the criticism opponents have lodged against the project.?
The American Petroleum Institute, in its Oil Sands Fact Check report Monday, said it looks like the President hasn?t even bothered to read his own State Department?s Draft Environmental Impact Statement.
?If he had he would know that his State Department found ? after almost five years of review and numerous studies ? that Keystone XL would be a big job creator (supporting 42,100 jobs); that gas prices would not increase due to the pipeline (in fact because of more supply they will likely decrease); and that greenhouse gas emissions will not significantly increase with Keystone XL.?
Barack Obama keeps ignoring the most important reason for Keystone XL ? U.S. energy security and independence, which cannot be achieved without Canada, and it would be a massive strategic blunder for him not to lock that up while in his grasp.?Meanwhile, Canada is demonstrating it will survive and thrive without Keystone XL, making the President?s delay and pressure tactics less effective every passing day.
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