Making the oil sands case

The Canadian government has rolled out its heavy artillery in support of the Keystone XL pipeline, with Natural Resources Minister Joe Oliver spending a chunk of the last week of July lobbying decision makers in Washington, D.C.

In the boldest show yet of support for the TransCanada project — raising questions, in the process, about whether the government of Prime Minister Stephen Harper will do the same thing for Enbridge’s Northern Gateway venture — Oliver made his pitch to top level officials and business leaders.

He discussed the controversial $7 billion pipeline, connecting the Alberta oil sands with Gulf Coast refineries, with White House officials, Energy Secretary Stephen Chu and Republican Reps. Doc Hastings of Washington and Ed Whitfield of Kentucky.

Oliver told them that XL could deliver 30 million barrels of oil sands crude to the United States every two months, matching the volume that the U.S. recently withdrew from its emergency stockpiles to offset a shortfall from Libya.

“We remain optimistic that the (U.S.) government understands that this is a very important project for the United States to provide secure energy from a reliable friend and partner,” he said, estimating the pipeline would generate more than $20 billion in new construction for the U.S. economy, along with 20,000 construction and manufacturing jobs.

Oliver said Canada is confident that safety and environmental issues, currently under scrutiny during an assessment by the U.S. State Department and Department of Energy “can be addressed in a satisfactory manner.”

U.S. senators have been told that the first stage of Keystone to Cushing, Okla., has spilled some oil in recent weeks, but TransCanada Chief Executive Officer Russ Girling delivered a sharp rebuke on July 28 to those claiming the spill originated from Keystone pipeline ruptures.

He said the dozen incidents involved leaks aboveground at pump stations and not the Keystone pipeline in the ground, adding the total volumes were measured in gallons, not barrels.

“Like any large project, there are always bugs to work out and we will work through those startup issues,” Girling said.

In answer to strident environmental opposition, Oliver noted his government has just earmarked C$50 million to monitor the potential harm from oil sands production on water, air, plants and animals, arguing Alberta oil fields currently account for only 0.1 percent of global greenhouse gas emissions and match the per-barrel emissions from heavy oil produced in California and Saudi Arabia.

He said future regulations will require producers to recycle 90 percent of water and use on average no more than one barrel — compared with six barrels at some operations — of water to produce one barrel of oil.

—Gary Park