The XL Keystone Pipeline decision continues to dominate news in Canada. It should be no surprise that a good portion of Canadians believe that the decision by the Obama Administration to delay the pipeline decision past the 2012 election was politically motivated. Despite flying around the country selling his Jobs Act, Obama turned down the largest “shovel ready” project. Even though Obama is aware that a decision for the pipeline would not lose him a single vote, he decided to delay, if not endanger the project.
After the State Department announced that yet another environmental review was needed on the project, Nebraska and TransCanada Pipelines agreed that the pipeline would be rerouted. TransCanada had hoped that the project decision could be within the next six months. Not so fast, you wouldn’t want to interfere with the re-election of President Obama.
The delay doesn’t make sense from a practical point of view. America continues to consume oil, whether or not the oil sands provide it. Environmental Impact studies have shown that even before the rerouting solution that the impact on the environment are minimal. Yet the President has chosen to make this shortsighted decision to appease a minority, his far left base. Interested in creating jobs and improving the economy? I think not.
The articles lamenting the American’s reluctance to accept the Keystone pipeline may be overlooking the Bakken and Texas tar sands that are already each producing over 500,000 barrels per day, and ramping up fast.
The background: the Alberta oilsands must have outlets to markets, chiefly in the U.S. The most efficient way is a new pipeline running through the American heartland to the Gulf of Mexico.
There on the Gulf Coast is a concentration of refineries with the capacity to refine oilsands bitumen, something few refineries are able to do.
Everyone wins. New oilsands extraction and upgrading capacity can continue, fuelling one of the greatest industrial projects Canada has ever seen. Scores of billions of dollars will be invested in this massive resource if market access can be ensured.
There is no prospect of reducing Americans’ consumption of oil in the short to medium term without a painful and unnecessary decline in their standard of living. Most of the alleged alternatives to oil are simply no real substitute for its unique properties, especially as a transport fuel.
Alternative sources of oil exist, but they tend to come from far less desirable places than Canada – think Saudi Arabia and Venezuela. Those places have lower environmental, human rights, labour and rule of law standards than we do. Less oil from Canada doesn’t mean less consumption, just nasty sources of oil.