Canada defiant after U.S. oil pipeline rebuff

Thu Nov 10, 2011 7:07pm EST
 
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By David Ljunggren, Randall Palmer and Jeffrey Jones

OTTAWA/CALGARY (Reuters) - Canada will keep promoting crude from the tar sands of northern Alberta as a secure source of energy despite a U.S. decision to delay approval of a pipeline to carry the oil from Alberta to Texas, officials said Thursday.

The Canadian government and the oil industry have limited options, however, as another controversial proposal to build a pipeline to export tar sands crude to Asian markets is just at the beginning of a lengthy review process.

The U.S. move to put off a decision on TransCanada Corp's proposed $7 billion Keystone XL pipeline for 18 months is a significant blow for Ottawa, which has strongly backed the project.

"While we are disappointed with the delay, we remain hopeful the project will be decided on its merits and eventually approved," Natural Resources Minister Joe Oliver said in a statement e-mailed to Reuters.

"In the meantime, our government will continue to promote Canada, and the oil sands, as a stable, secure, and ethical source of energy for the world."

The right-leaning Conservative government - which garners much of its support from Western Canada and is a firm supporter of the oil and gas industry - says the United States is better off buying oil from Canada, a neighboring stable democracy, than from other suppliers.

It has also touted the thousands of jobs that building the pipeline would create in Canada and the United States. Prime Minister Stephen Harper had referred to a U.S. approval as a "no-brainer."

Washington's decision to delay approval, which could end up killing the project, followed a campaign by protesters who complain oil sands crude is particularly energy intensive to extract, creating huge carbon emissions. They also point to a possible environmental disaster if the pipeline broke.   Continued...