Keystone delay good for Canada?

EDMONTON, Alberta, Nov. 22 (UPI) -- Delays in approval for the Keystone XL pipeline should lead Canada to expand oil export options to cut over-reliance on the United States, an official said.

Pipeline company TransCanada wants to build Keystone XL from tar sands projects in Alberta, Canada, to refineries along the southern U.S. coast. The U.S. State Department is reviewing route options for the pipeline, however, which could lead to a delay of at least a year before the project gets the federal backing it needs.

Former Canadian Environment Minister Jim Prentice said Washington made a serious mistake by delaying the project and the move should encourage Ottawa to expand its export options to other markets like Asia.

"Right now, both our crude oil and natural gas are selling at a discount into a continental marketplace because we have essentially one customer for our exports," he was quoted by the Edmonton Journal as saying.

"Canada will never get full value from its oil and gas resources until we have expanded pipeline capacity to the West Coast."

Canadian Prime Minister Stephen Harper said during a meeting with Asian trading partners in Hawaii that the State Department's decision highlighted the importance of working closer with the Chinese.

The Canadian government said a heavy crude oil pipeline would get built to carry oil from tar sands projects in Alberta province one way or the other. The direction of that pipeline would depend on the end consumer.