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Nov 16, 2011
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Analysis: Canada oil export hopes at risk after pipeline delay

CALGARY, Alberta (Reuters) – The delay in a massive Canada-Texas pipeline project will inflame opposition to other export options for crude from Canada’s oil sands and threaten the nation’s aim of becoming a top global energy supplier.

Industry officials say the United States’ move, after 39 months of review, to seek a new route for TransCanada Corp’s $7 billion Keystone XL pipeline away from a crucial water source in Nebraska could derail the project as shippers and customers grow impatient.

The Canadian government and energy executives, expressing disappointment with the decision, say they will push even harder to advance an export route to the Asian market now that the Alberta-to-Texas alternative for crude derived from the oil sands is delayed for more than a year, adding to fears it could eventually be shelved.

It will not be easy.

“This does underscore the necessity of Canada making sure that we are able to access Asia markets for our energy products,” Prime Minister Stephen Harper told reporters at the Asia-Pacific Economic Cooperation forum on Sunday.

“That will be an important priority of our government going forward and I indicated that yesterday to the president of China.”

The industry will move quickly to tap Asian markets in the absence of the pipeline, said Steve Laut, president of Canadian Natural Resources Ltd, which has committed 120,000 barrels a day of oil to Keystone XL, in comments to analysts earlier this month. “It’s pretty clear if Keystone doesn’t go ahead, that U.S. markets are not in favor of having Canadian oil.”

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    • About Jeffrey

      "Jeffrey Jones is a senior reporter based in Calgary, Alberta, Canada. Jeff covers a wide array of topics, including energy, environment, business and general news. He is also in charge of coordinating in-depth energy-related stories for the United States and Canada. Jeff has a keen interest in music."
      Joined Reuters:
      1994
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