News Articles Featured | Vancouver Sun | July 26, 2011
President Barack Obama’s administration must meet a Nov. 1 deadline for deciding on a proposed US$7 billion pipeline to carry Canadian oil to the Gulf of Mexico under legislation passed by the U.S. House.
The measure, which passed today 279-147, requires Obama to issue a final order on Calgary-based TransCanada Corp.‘s Keystone XL pipeline. The project would deliver 700,000 barrels of crude a day from Alberta’s oil sands to Gulf refineries through Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.
The U.S. State Department has jurisdiction over the project because it crosses an international border and has said it plans to make a decision by the end of the year. Environmental groups have urged Secretary of State Hillary Clinton to reject the pipeline because extracting oil from Canada’s sands releases more greenhouse gases than conventional drilling and pipeline leaks may endanger drinking-water supplies. The project has been awaiting approval since 2008.
“We’ve had it with the delays,” Representative Lee Terry, a Nebraska Republican who sponsored the bill, said today on the House floor. “It’s time that we act.”
The Senate isn’t expected to take up a similar measure and Obama opposes the House bill.
The project will produce 20,000 U.S. construction jobs and economic benefits for U.S. companies that may win contracts to help develop Canada’s oil sands, according to Marty Durbin, executive vice president of the American Petroleum Institute, a Washington-based industry group.
“The Keystone XL project has undergone extensive analysis and review,” Durbin said today on a conference call with reporters. “There is very strong interest among our members and the industry in seeing this pipeline complete. It is time to move forward.”
Apart from environmental concerns, opponents say the pipeline may push gasoline prices higher in the U.S. Midwest, where an existing Keystone pipeline ends. A bottleneck there is keeping prices down in that region while making oil and gasoline more costly elsewhere in the U.S.
“There’s a common misconception this pipeline will bring more supply,” Ryan Salmon, energy policy adviser for the Reston, Virginia-based National Wildlife Federation, said today on a conference call. “That’s not true. It’s moving an existing supply from the Midwest to the Gulf Coast where it can be exported.”
House Republicans rejected a Democratic amendment that would designate the Canadian oil for consumption exclusively in the U.S.
“The bill is unnecessary because the Department of State has been working diligently to complete the permit decision process for the Keystone XL pipeline and has publicly committed to reaching a decision before December 31, 2011,” according to a July 25 statement from the White House Office of Management and Budget.
The State Department has been reviewing the Keystone XL project for almost three years, Terry said.
“The people of the United States will bear all the risks of an onshore oil spill and reap absolutely none of the benefits,” Representative Alcee Hastings, a Florida Democrat, said today on the House floor. “This bill will never become law.”
The State Department has the final say on the project under an executive order issued in 2004 by President George W. Bush. Alberta holds estimated reserves of 173 billion barrels of oil based on current technology, a crude reserve second in the world behind Saudi Arabia, according to the Canadian Association of Petroleum Producers.
“Oil companies are clearly pressuring their friends in Congress to rush to the finish line on this dangerous tar-sands pipeline,” Tiernan Sittenfeld, senior vice president of government affairs for the Washington-based League of Conservation Voters, said today on a conference call with reporters.
The bill is H.R. 1938.