US Keystone rebuff turns Canada's attention to Northern Gateway pipeline
Reuters reports the US move to put off a decision on TransCanada Corp's proposed $7 billion Keystone XL pipeline for 18 months is a significant blow for Ottawa, which has strongly backed the project.
The Canadian government and the Alberta oil industry will now turn their attention to the Northern Gateway pipeline project that would stretch for 1,170km from Brudenheim in Alberta to a new marine terminal in northern British Columbia to serve Asian markets. But the $5.5 billion project which has significant Chinese backing, is already almost a year behind schedule and would not go into operation in 2017 at the soonest. Even this schedule is optimistic: starting in January, an unprecedented 4,000-plus people – the vast majority environmental activists – will speak for a collective 650 hours at public hearings.
Reuters quotes Sara MacIntyre, a spokeswoman for Canadian Prime Minister Harper on the Northern Gateway: "(There's) obviously growing energy demand in Asia as the economies continue to grow, and Canada will be looking for a buyer." The pipeline will have the capacity to export approximately 525,000 barrels of oil per day and import approximately 193,000 barrels of condensate a day to a new marine terminal where up to 200 tankers per year would carry crude to market in China, Singapore and Korea.
MINING.com reported at the end of October the US state department's anonymous leak to the media lowering expectations about a decision on Keystone this year should not have come as a surprise to anyone following Barack Obama's poll numbers or the increasing bitterness on the left about his perceived closeness to industry.
Apart from environmental campaigners and clean energy proponents other players may also be rejoicing at the delay, which may well turn out to be permanent: MINING.com has argued that if Keystone XL is built the biggest losers will not be the Greens, it will be Big Oil: Keystone XL should bring Canadian crude, which at the moment sells at a $30 discount, in line with global prices. At the same time a huge slice of the record profits of Chevron, ConocoPhillips and Exxon Mobil will we wiped out. Here's why.