Republicans press Obama to approve oilsands pipeline
By Sheldon Alberts, Postmedia News March 31, 2011
WASHINGTON — The heated policy debate over Alberta's oilsands took centre stage Thursday in the U.S. Congress, with Republican lawmakers claiming President Barack Obama has "failed to act" swiftly enough to ensure a secure long-term supply of Canadian crude.
A day after Obama said the U.S. will need "steady and stable and reliable" Canadian oil as it slashes overall imports over the next decade, GOP lawmakers said there is an "urgent" need for the U.S. to further tap Canada's market by approving Calgary-based TransCanada's $7 billion Keystone XL pipeline from Alberta.
One by one, GOP lawmakers on a House foreign affairs subcommittee pressed Obama to sign a presidential permit authorizing construction of the controversial pipeline, which would ship more than 500,000 barrels of oilsands crude a day from northern Alberta to refineries on the U.S. Gulf Coast.
"We need to immediately concentrate on replacing foreign oil from thugocrats like Hugo Chavez in Venezuela with reliable, stable allies like Canada," said Rep. Connie Mack, a Florida Republican who chairs the western hemisphere subcommittee.
"This oil will be extracted and sent to Asia if it is not allowed to support our southern (U.S.) refineries."
Rep. Ted Poe, a Texas Republican, said Obama's policy on Canadian oil was to "delay, delay, delay" the Keystone XL project. His message to the U.S. president: "It's time to start laying pipe."
The Keystone XL pipeline has been in limbo as the U.S. State Department weighs whether to grant a presidential permit, required because the project crosses an international boundary.
State Department officials delayed the process further last month by ordering a supplemental environmental impact study to address concerns about pipeline safety and climate change issues around oilsands production.
"It makes absolutely no sense to delay this Keystone XL pipeline," said Rep. Jean Schmidt, an Ohio Republican. "Our friends are Canadians. It is always good to do business with friends."
Several pro-pipeline witnesses at Thursday's hearing said growing unrest in the Middle East poses the biggest threat to America's energy security.
Oil from "quiet, stable, friendly" Canada "is not the perfect answer, but a step toward better energy security for the country," said Paul Sullivan, a former National Security Council member and now a Georgetown University professor.
Increasing U.S. access to Canada's oil resources of 175 billion barrels will "keep certain other countries in check," said Sullivan, citing the price shocks often caused by disruption in supply from OPEC nations.
"Canada is not a member of OPEC. It could be a counter to OPEC."
With the Middle East in turmoil, the witnesses said approval of the Keystone XL pipeline would provide Texas refineries with a source of heavy crude that could further offset declining imports from Venezuela.
Venezuela is currently the fifth-biggest supplier of oil to the United States — behind Canada, Mexico, Saudi Arabia and Nigeria. Canada is the biggest supplier — providing about 23 per cent of America's oil imports — but Keystone XL would provide a new link to Texas refineries.
"I would rather the U.S. relies on our friends the Canadians — and our own internal sources of unconventional oil, such as shale oil — than on possibly unreliable oil from what could prove to be a declining regime of Hugo Chavez," Sullivan said.
Rejecting Keystone XL would be "energy security folly," he added.
David Goldwyn, an international energy consultant, said in written testimony that getting Canadian oil to Texas would help "moderate" gasoline prices.
"The alternative is to import longer distance crude oil or import more petroleum products," Goldwyn said. "Both those options will drive up gasoline prices and involve additional emissions for transporting that crude or product to the U.S. market."
The lone anti-pipeline witness at the hearing said Keystone XL's construction would do little to shield American consumers from gasoline price spikes.
Jeremy Symons, vice president of the National Wildlife Federation, said prices of Canadian crude had jumped $20 per barrel since the recent crisis in Libya began.
"Why do oil prices in Canada go up when there is conflict in North Africa? Because oil companies don't care about energy security or price stability," Symons said in his written testimony. "They care about profits. And if there is a crisis in one part of the world, you can bet they will gouge us with high oil prices everywhere."
Symons told the congressional committee Alberta's "scorched earth tarsands operations are the most destructive source of oil on the planet."
Rep. Eliot Engel, the ranking Democrat on the committee, said he has not made up his mind about Keystone XL. But he said it was important for the State Department to take its time in examining the project's environmental impacts — a lesson the U.S. should have learned from the regulatory failures prior to last year's BP oil spill in the Gulf of Mexico.
While increasing Canadian oil imports might reduce U.S. reliance on Middle Eastern oil, "I wonder whether this pipeline actually increases (overall oil) dependence in the long run," Engel said.
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