Advertisement

Keystone XL need mulled in shale era

U.S. politics shouldn't sway Canada's energy future, scholar says.

By Daniel J. Graeber

CALGARY, Alberta, Jan. 29 (UPI) -- Pipelines to the Canadian coasts, not necessarily Keystone XL, will diversify an export economy dependent on U.S. markets, a Canadian energy scholar said.

Canada exports nearly all of its oil to the United States, which is relying less on foreign oil because of the increase in shale oil output. Data from the U.S. government show oil imports from Canada were down about 6 percent for the week ending Jan. 23.

Advertisement

Dan McFadyen, program director of the extractive resource governance program at the University of Calgary, said in a Wednesday interview with the Canadian Energy Pipeline Association pipeline access to the East and West Coasts would help diversify the nation's export economy.

"We are mostly limited to the U.S. market, and it's not clear in that market, whether they are going to create a pathway for re-export of Canadian crude, or in fact, even have the infrastructure to present that opportunity, as the debate around Keystone XL continues," he said.

The pipeline, proposed by TransCanada more than six years ago, has become a scapegoat in the debate on U.S. energy policies.

Advertisement

The new Republican-led Congress in the United States made Keystone XL its first order of business when it took its seat in early January. U.S. President Barack Obama said he'd veto any legislation meant to circumvent the normal vetting procedure for the pipeline.

Analysis from consultant group Wood Mackenzie, e-mailed to UPI, said Canadian crude oil would likely find its way to the U.S. and other markets with or without Keystone XL. Rail, or TransCanada's proposed 1.1 million barrel per day Energy East pipeline through eastern Canadian provinces, could serve as alternatives.

"Our analysis suggests considerable volumes of this crude could still reach the U.S. Gulf Coast refineries via Energy East pipeline and then transloaded onto internationally flagged oil tankers," the analysis found.

Keystone XL, if approved, would run through the central United States to southern U.S. refineries. While supporters said it will help ensure North American energy security, the White House said it's largely a pipeline meant to export Canadian crude oil.

McFadyen said diverse market access is vital to the Canadian oil sector's success. Whether it's a pipeline to the East or West Coast, new oil routes will give Canada the "opportunity to gain access to those markets for crude oil and not be dependent on U.S. policy and politics to determine our future."

Advertisement

Latest Headlines