Expanding oil exports top priority: Canadian minister

Fri Dec 2, 2011 3:47pm EST
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By David Ljunggren and Jeffrey Jones

TORONTO (Reuters) - Canada believes the United States will ultimately approve TransCanada Corp's proposed Keystone XL pipeline, which Washington put on hold last month amid fierce environmental opposition, Natural Resources Minister Joe Oliver said on Friday.

The $7 billion oil pipeline to Texas from Alberta, as well as a new pipeline to Canada's West Coast, are crucial to preventing a costly bottleneck in export capacity over the next four to seven years as oil sands production jumps, Oliver said.

Keystone XL, which would carry oil sands-derived crude to numerous refineries on the Gulf of Mexico, still makes enormous economic sense for the United States, he told a Reuters editorial board in Toronto.

"I think it will go through, but obviously later than we had hoped," Oliver said.

A recent decision by the state of Nebraska to back a shift in the pipeline's route, away from a major aquifer, was "a significant development", he said.

Oliver's comments were among the most bullish from Canada's Conservative government since Washington announced the Keystone go-ahead decision would be delayed at least until early 2013, after next year's U.S. presidential election.

The postponement was a big blow to Ottawa, which has made bolstering exports of crude from the tar sands - the world's third-largest oil deposit - a top policy priority and one that has kicked off a lobbying effort spanning three continents.

"This delay is not a happy event for us, but we're going to continue to talk about the advantages of the pipeline," Oliver said. Those include jobs, economic activity and reliable energy supplies, he said.   Continued...