Canadian official: Keystone rejection wouldn’t harm US-Canada relationship

Canadian officials are strongly pressing the Obama administration to approve the TransCanada Corp.’s project to bring Canadian oil sands to Gulf Coast refineries.

Pipeline advocates were buoyed by a new State Department draft last week, which concluded that that approval or rejection of TransCanada Corp.’s project is “unlikely to have a substantial impact on the rate of development in the oil sands.”

Environmentalists opposing Keystone have cast the project as a major catalyst for expansion of carbon-intensive oil sands projects.

Oliver on Wednesday touted the report and continued his government’s push for Keystone’s approval.

“While it is up to the U.S. to choose how it will meet its long-term need for imported oil, by any objective measure the most responsible source is Canada,” he said. Canada is already the top supplier of oil to the U.S.

Canadian officials and energy companies are also looking to expand their customer base for the oil sands with proposed pipelines to other markets.

It’s a goal Oliver said has been “intensified” – but was not created – by the U.S. failure to approve Keystone thus far.

“We have a critical strategic objective to diversify,” he said at the IHS CERAWeek conference.

Oliver touted what he said will be huge economic benefits that Keystone XL would bring the U.S. and sought to counter criticisms of the oil sands’ environmental footprint.

He noted that oil sands producers have driven down the greenhouse gas emissions related to producing each barrel by 26 percent between 1990 and 2010.

However, while this so-called emissions “intensity” has fallen, overall emissions are rising as production continues to expand.

Canadian officials are also preparing greenhouse gas emissions rules for oil and gas development, the latest step in a sector-by-sector approach that also addresses vehicle emissions and coal-fired power plants.

Oliver, during his visit to Houston, is also meeting with U.S. Deputy Secretary of Energy Daniel Poneman to “to discuss Canada’s bilateral relationship with the United States, our ongoing energy partnership and our mutual commitment to environmental stewardship,” Oliver’s office said.

Oliver spoke in Chicago on Tuesday, remarks that criticized green groups that are battling Keystone XL.