Heavy oil from Alberta will be developed with or without the proposed Keystone XL pipeline, though the fuel will be delivered to market using less efficient means, Canada’s ambassador to the U.S. said.
Speaking at a Bloomberg Government breakfast in Washington today, Gary Doer said he supported the U.S. State Department’s finding in March that blocking the TransCanada Corp. (TRP) pipeline won’t stop production of bitumen, a type of heavy crude oil, in the oil sands of the Canadian province.
Enviromentalists oppose Keystone in part because they say production and use of bitumen releases more greenhouse gases tied to climate change compared with conventional forms of crude.
“Oil will get to market,” Doer said. “It gets to market with pipelines. It will get to market by trains. It will get there by trucks. It will get to India, it will get to China, and it will continue to have the opportunity to go to U.S. refineries, which create a lot of jobs for the United States for the manufacturing sector on the U.S. Gulf Coast.”
The State Department is reviewing TransCanada’s (TRP:US) application to build the $5.3 billion link between Alberta and Steele City, Nebraska. From Nebraska, the oil would eventually find its way to refineries along the Gulf Coast.
The State Department has jurisdication because the pipeline crosses an international border.
Environmentalists argue that developing the oil sands will be slowed if President Barack Obama’s administration rejects Keystone, and cite lobbying by TransCanada and Canadian officials such as Doer as evidence of the project’s importance.
The U.S. Environmental Protection Agency, responding to the State Department’s draft environmental analysis, said the report was insufficient in assessing how Keystone would affect oil-sands development and therefore greenhouse-gas emissions.
Doer said Canadian officials are pressing the point that the oil will be developed regardless of the U.S. decision. He said Keystone will reduce the costs to transport the fuel and release less carbon dioxide than transporting the fuel by train or truck.
“I haven’t seen anything that refutes this common sense fact that this oil is going to go from Canada to market,” Doer said. “We’re trying to make sure the facts are straight. It’s coming on trains now.”
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