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FM
Former Member
Keystone XL Pipeline

Obama Finally Got Something Right


By Brian Hicks
Tuesday, September 6th, 2011
Source - Energy and Capital

Every day, more than $43,390,000 will begin a journey from Hardisty, Alberta, Canada.

It’ll enter the United States at Morgan, Montana. From there it’ll pass through Steele City, South Dakota, Illinois, and Nebraska before entering into Cushing, Oklahoma...

It will end its journey in Houston, Texas.

When all is said and done, the $43 million will have traveled 1,980 miles.

I’m talking about the proposed $7 billion Keystone XL Pipeline that will carry over 500,000 barrels of crude oil from the Fort McMurray oil sands projects to the United States.

Two weeks ago, the Obama administration approved the controversial pipeline project.

And who can blame them?

With the unemployment rate at 9.2%, most published reports say Keystone XL will create 120,000 jobs — 20,000 in actual pipeline construction and 100,000 indirectly in supplies and services.

These are jobs that can start immediately.

To give you an idea of how important this is to the United States — and to Obama in particular — even the liberal pro-environment rag, the Washington Post, published a piece on August 28th entitled, “Say Yes to Canadian Oil Sands”:

We would be crazy to turn our back on this. In a global oil market repeatedly threatened by wars, revolutions, and natural and man-made disasters — and where government-owned oil companies control development of about three-quarters of known reserves — having dependable suppliers is no mean feat.

We already import about half of our oil, and Canada is our largest supplier, with about 25 percent of imports. But its conventional fields are declining. Only oil sands can fill the gap.

As I’ve mentioned at least a hundred times now, Canada has the second-largest known oil resource in the world at an estimated 175 billion barrels.

Sure, the vast majority of these reserves are oil sands, also known as tar sands and “dirty oil” to environmentalists, but these are proven reserves.

Probable reserves could be higher, with estimates between 500 billion and 1 trillion barrels.

Right now, Canada exports over 1.7 million barrels of oil to the United States...

You do the math.

Canada could supply us with oil for centuries. It’s almost inexhaustible.

And that’s why I call it "the forever bull market."

Moreover, Canada is a pro-resource government; newly-elected Prime Minister Stephen Harper is an oil man. Canada is friendly. And it’s our border neighbor, making transportation costs more affordable and efficient...

So the Keystone XL Pipeline could substantially reduce U.S. dependency on oil from the Middle East and other regions, according to a report commissioned by the Obama administration. The report suggests the pipeline — coupled with a reduction in overall U.S. oil demand — "could essentially eliminate Middle East crude imports longer term."

I agree with the Washington Post: We would be crazy to turn down the Keystone XL Pipeline.

But there’s more to this story that makes me insanely bullish on Canadian oil sands stocks.

You see, we aren’t the only ones competing for Canadian oil sands. The Chinese are there, too.

Sinopec, a Chinese state-controlled oil company, has a stake in a $5.5 billion plan drawn up by the Alberta-based Enbridge company to build the Northern Gateway Pipeline from Alberta to the Pacific Coast province of British Columbia.

This past June, Alberta Finance Minister Lloyd Snelgrove met with Sinopec and CNOOC, China's other big oil company, and China's largest banks.

The proposed Northern Gateway Pipeline is making progress. And it could start construction at the same time as Keystone XL.

Right now, a Chinese citizen consumes only 3% of the oil the average American consumes. If Chinese per capita oil consumption increases — and it most surely will — the price of oil will have nowhere to go but up...

And it will make Canadian oil sands that much more valuable.

In fact, if Chinese per capita oil consumption increases to 17% of that of an American, the Middle Kingdom will essentially consume 88 million barrels per day. That’s right — China alone will consume the current daily global production that exists.

To put it another way, the world oil complex would have to produce over 150 million barrels a day.

With Canada sitting on 175 billion barrels of proven reserves, it is going to become the most important oil exporter of this century...

And oil sands production companies like Suncor, Canadian Natural Resources, and Husky will become the Exxon, BP, and Chevrons of the world.

Profit from the Peak,



Brian Hicks
Publisher, Energy and Capital

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U.S. will approve Keystone XL pipeline if Obama looks at facts, not 'noise': ambassador Gary Doer


By Sheldon Alberts, Postmedia News
September 6, 2011
Source - Montreal Gazette

Gary Doer, Canada's ambassador to the United States, says the Keystone XL project will get the green light in the U.S. if the Obama administration pays attention to facts over rhetoric.
Photograph by: File, Reuters


WASHINGTON — Canada's ambassador to the U.S. Gary Doer said Tuesday he is confident the Obama administration will approve the controversial Keystone XL oilsands pipeline if it is guided by facts about the project's safety and environmental impacts, and not the "noise" generated by opponents who protested for two weeks outside the White House.

In an interview with Postmedia News, Doer said he does not believe the anti-oilsands activists who were arrested in daily White House sit-ins represent majority of the American public or political opinion about Canadian oil.

"If you would ask the United States — the American public — do you want to get your oil from the United States first? They would say yes. And if you have to have oil from outside the United States — would you prefer to get it from Canada or the Middle East? They would say we would prefer to get it from Canada," Doer said. "I have always believed that the public gets it."

More importantly for the Canadian government — and the Alberta oil industry — key officials in the U.S. administration are siding with Keystone XL over increasingly energized opponents in America's environmental community.

"Our issue is — is this decision going to be made on facts, or is it going to be made on noise? And if it is made on facts, I am confident," Doer said.

"We're confident of the facts. But we are not taking any decision for granted."

The Obama administration is planning a decision by year's end on whether to approve the 2,700-kilometre pipeline, which could carry up to 900,000 barrels of oil per day from northern Alberta to Texas refineries.

More than 1,250 Keystone XL opponents were arrested in protests that lasted from Aug. 20 to Sept. 3 on the sidewalk outside the White House.

The civil disobedience succeeded in generating substantial coverage in the U.S. media, but it's not clear the publicity has done anything to alter the course of decision-making within the Obama administration.

Last week, U.S. Energy Secretary Steven Chu said the Keystone XL pipeline "is not perfect, but it's a trade-off."

Chu said it is "more comforting" for the U.S. to get its oil from Canada than less-friendly and more unstable nations, and that technological improvements in oilsands extraction technology has made Canadian oil more environmentally palatable.

Chu "amplified" the Canadian government's view that "Americans feel more comfortable with oil from Canada than from other countries," Doer said.

Doer was buoyed, too, by the State Department's recent final environmental study, which found the 2,700 kilometre pipeline would have "no significant impact" on natural resources.

The study largely dismissed concerns that increased U.S. imports of oilsands crude would boost greenhouse gas pollution, saying that life cycle emissions from oilsands crude are only marginally higher than from oil currently imported from Venezuela.

The State Department also said it was satisfied with efforts by Calgary-based TransCanada, the company building the pipeline, to mitigate the threat of possible oil spills along Keystone XL's route within the U.S.

Protesters at the White House have not given Canada's oil industry enough credit for technological gains made in recent years in oilsands production, Doer said.

But "the State Department looked at all of those issues, it went through all the environmental issues — water, land use, emissions," he said.

"It is not my opinion now, or Canada's opinion, it's the State Department's opinion. And they went through all of these things pretty diligently."

Doer said he considered the State Department's environmental green light for Keystone XL to be the "first major step" toward approval of the pipeline.

The State Department has begun a 90-day "national interest determination" period to determine if the pipeline is in America's economic and energy security interests.

With the pipeline promising to create thousands of direct construction jobs, Doer said there is a compelling case for President Barack Obama to say yes to Keystone XL.

"The 20,000 people who will get jobs in the construction industry, who want this project to go ahead, they are not out protesting anywhere," Doer said. "But there is 20,000 people that will be employed."

Still, there are potential hurdles elsewhere.

Nebraska's Republican governor, Dave Heineman, last week wrote Obama urging him to reject Keystone XL, out of concern a pipeline break would pollute the vast Ogallala Aquifer. The pipeline would cross a significant portion of the aquifer, which provides drinking water to about 80 per cent of people in the state.

Heineman is under pressure from a bipartisan coalition of Democrats and Republicans in the state legislature to try to force TransCanada to change the route of the pipeline.

Doer said he "understands" the politics in Nebraska, where opposition to Keystone XL has been the strongest.

But he noted that governors in five other states along the proposed U.S. route of the pipeline — Montana, South Dakota, Kansas, Oklahoma and Texas — are in favour of Keystone XL's construction.

Heineman "disagrees with five other governors and the State Department on location. There is (already) thousands of miles of pipeline, thousands of miles, in the area he is talking about," Doer said.

"I think he is a smart man. But we think the State Department is full of smart people on it, too. And we think the other five governors are smart, too."

The State Department study found that "in no spill incident scenario would the entire Northern High Plains Aquifer system be adversely affected."

Officials studied five alternative routes for Keystone XL in order to largely avoid the aquifer but found all would have "worse or similar" impacts on the environment.

Doer also took aim at U.S. environmentalists who target Canada as an environmental offender because of its aggressive push for new oilsands markets.

Environmental author Bill McKibben, who organized the anti-Keystone XL protests at the White House, said Keystone XL "is a stain on the national reputation" and that the country was "behaving like a rogue state in regards to tarsands."

Opponents overlook joint action the U.S. and Canada have taken to reduce dependence on fossil fuels, including agreeing to joint standards to lower emissions from light vehicles by 25 per cent, Doer said.

"When you look at the White House protests they are not giving I think the president credit, and by extension I would argue Canada, on dealing with the largest emitting sources, light vehicles," he said.

"People want to reduce the amount of fossil fuels, and some people want to eliminate all of them, but they have no plan how they are going to do it."
FM

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