Canada optimistic Texas pipeline will be approved

By Rob Gillies

Associated Press

Published: Thursday, Jan. 19 2012 12:00 a.m. MST

White House Press Secretary Jay Carney speaks during the daily briefing at the White House in Washington, Wednesday, Jan. 18, 2012.

Susan Walsh, Associated Press

TORONTO — President Barack Obama's decision to temporarily block a pipeline from Alberta to Texas went over badly in Canada, but Canadian officials are hopeful it eventually will be approved. Meanwhile, Canada will push harder for a pipeline to the Pacific Coast, where oil could be shipped to China.

Alberta Premier Alison Redford, the leader of the Canadian province that has the world's third-largest reserves of oil, said Thursday that while Canada is disappointed at Obama's decision, the government believes Obama has made it clear the U.S. would consider a new Keystone XL pipeline application with a new routing.

Obama called Prime Minister Stephen Harper to explain that the decision on Wednesday was not on the merits of the pipeline but rather on the "arbitrary nature" of a Feb. 21 deadline set by Republican legislators as part of a tax measure he signed, Harper's office said.

"The fact that the president has said that the decision was not based on the merits we take as a signal that there is an opportunity to make a decision that is in the national interest that allows the project to go ahead," Redford told The Associated Press in a telephone interview.

TransCanada Corp., the pipeline company based in Calgary, Alberta, which proposed the Keystone XL pipeline, quickly said it would reapply and said it expects the presidential permit to be processed in an expedited manner that would allow the pipeline to go online in late 2014.

In Washington, the proposed $7 billion pipeline has become a political hot potato.

Republicans — who earlier put the president in the awkward position of having to make a decision on it before Feb. 21 — now hope to force Obama to deal with it yet again before next November's presidential election. He wants to put it off beyond that.

Republican Rep. Fred Upton, chairman of the House Energy and Commerce Committee, said he will call Secretary of State Hillary Rodham Clinton, who recommended Obama's rejection, to testify at a hearing as early as next Wednesday.

"This is not the end of the fight. Republicans in Congress will continue to push this because it's good for our country and it's good for our economy and it's good for the American people," especially those who are out of work, said Republican House Speaker John Boehner.

Republicans are looking to drive a wedge between Obama and two key Democratic constituencies. Some labor unions support the pipeline as a job creator, while environmentalists fear it could lead to an oil spill disaster.

While TransCanada is prepared to reapply, it has no guarantee a new applicaiton will get quick approval.

U.S. Assistant Secretary of State Kerri-Ann Jones said she could not guarantee the review would be sped up, saying TransCanada would have to start anew.

But Redford is hopeful it can be fast-tracked.

"To start from the beginning would be something that would certainly take some time, and of course have a greater economic impact, so I hope there is a spirit to try to at least move this to a place where the discussions are real, and we can move through it and hopefully get the approval," Redford said.

The 1,700-mile (2,740-kilometer) pipeline proposed by TransCanada would carry 800,000 barrels of oil a day from Alberta across six U.S. states to the Texas Gulf Coast, which has numerous refineries.

Obama previously expressed opposition to the plan, saying an alternate route was needed to avoid environmentally sensitive areas of Nebraska. But in an unrelated tax deal he cut with congressional Republicans, Obama had been boxed into making a decision by Feb. 21.

The prime minister's office said Harper expressed to Obama his "profound disappointment with the news" but that he hoped the pipeline would eventually be approved.

Natural Resource Minister Joe Oliver said it's clear the process is not yet over and said Canada is hopeful the pipeline will be accepted on its merits.

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