March 5, 2013 / 8:23 PM / 5 years ago

Canadian minister lauds pipeline to U.S., eyes other markets

CHICAGO (Reuters) - A top Canadian cabinet minister tried to persuade the United States on Tuesday that it should approve a controversial oil pipeline and said Canada is also looking to other markets to sell its oil.

Joe Oliver, Canada's Minister of Natural Resources, talks to media after speaking at the Canadian Aboriginal Minerals Association's 20th Anniversary Conference in Toronto, November 19, 2012. REUTERS/Brett Gundlock

The remarks by Natural Resources Minister Joe Oliver were one of the most high-profile attempts so far to pressure Washington into giving the green light to TransCanada Corp’s Keystone XL pipeline from the Alberta oil sands to Texas.

“We don’t normally advocate for a particular project but we believe that it’s in Canada’s strategic interest to get our resources to tidewater to attract a higher price and to access broader markets,” Oliver told reporters after a speech to the Chicago Council on Global Affairs.

The U.S. State Department said in a draft report last Friday that building the pipeline would not demonstrably boost emissions of greenhouse gases. Oliver said his visit to Chicago was arranged before the report was issued.

A final decision on Keystone will be made later this year by U.S. President Barack Obama, who is under heavy pressure from environmentalists to veto the project on the grounds it will help speed up the process of global warming.

Oliver said the pipeline would generate thousands of jobs in the United States and reduce reliance on imports from Venezuela and Saudi Arabia.

“America imports about 10 million barrels of oil a day and will need to import oil for decades to come,” he said in the speech.

“With Canada able to supply all of the U.S. future imported oil needs and the energy sector in the U.S. continually growing, together we can achieve North American energy independence by 2035, and probably before.”

Canada’s pro-business Conservative government is keen to see more development of the tar sands, which are estimated to contain 169 billion barrels of crude and are the world’s third-largest proven reserve of oil.

Ottawa is particularly keen to sell tar sands oil to China and backs Enbridge Inc’s proposed Northern Gateway pipeline from the tar sands to Canada’s Pacific Coast. But environmentalists and aboriginal groups oppose the pipeline and there are strong doubts whether it will ever be built.

Oliver also mentioned Kinder Morgan Energy Partners’ plans to expand its existing Trans Mountain pipeline from the oil sands to the Pacific Coast, as well as a proposal to run a pipeline to Eastern Canada from Alberta.

Canada’s economy is losing an “enormous amount of money” because the lack of pipelines from Alberta limits access to the country’s oil and reduces its price, Oliver said later on a conference call.

“We want to nurture our relationship with the United States but we know that it will be inadequate for all our oil production, and so we need to move west to the Asia-Pacific market, particularly to China,” he said on the call. “Going east would bring us closer to India.”

Oliver said high-profile activists have no business criticizing Keystone XL, noting that U.S. emissions from coal are far higher than those from the oil sands.

In Canada, not one major natural resource project has escaped opposition by one group or another, he told reporters in Chicago.

“They’re just opposed to the development of natural resources and this is one of them,” he said, adding that opponents see the pipeline as a symbol in their battle against hydrocarbons and the oil sands.

Reporting by Tom Polansek and David Ljunggren, writing by David Ljunggren; Editing by Dan Grebler; and Peter Galloway

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