Keystone may be revived after U.S. election: Canada official

Mon Feb 13, 2012 3:42pm EST
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NEW YORK (Reuters) - The finance minister for Canada's top oil producing province of Alberta said he expects the Canada-to-U.S. Keystone XL pipeline project to be "revived" following presidential elections this year.

In an interview on Monday, Ron Liepert said he thinks government approval for the $7 billion pipeline to ship around 830,000 barrels per day of oil sands crude from Alberta to South Texas could come following elections on November 6.

But he said Keystone's delays, and the possibility it will not be built, are already prompting Canada to seek new options to export its crude, including shipping it to Asia via the West Coast, or to the U.S. Eastern Seaboard via a Canadian pipeline reversal.

"We believe Keystone will be revived and approved after the presidential election," Liepert told Reuters. "But it's not a sure thing."

President Barack Obama put a hold on the Keystone XL project in January, saying the administration needed more time to assess the environmental impact of the proposed line before granting a presidential permit needed to build it.

Prior to a deal between the company and Nebraska's government, Keystone XL was slated to bisect the Ogallala aquifer in Nebraska which provides the water to irrigate huge areas of farmland in the U.S. Midwest. Environmentalists opposed the line due to the potential for oil spills and because production of Canadian oil sands crude is more carbon intensive than lighter crudes.

Proponents say Keystone XL would quickly increase U.S. oil supplies from a top trade partner and neighbor, cutting U.S. reliance on crude from OPEC and other overseas suppliers.

Obama has not rejected Keystone XL altogether, and TransCanada, the company planning to build it, has said it plans to apply for another permit.

"Keystone is the project that makes the most sense but we can't put all our eggs in one basket," Liepert said.   Continued...

Demonstrators carry a giant mock pipeline while calling for the cancellation of the Keystone XL pipeline during a rally in Washington November 6, 2011. REUTERS/Joshua Roberts