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Canada Warns Obama on Keystone XL

The Obama administration has spent three years reviewing the Keystone XL pipeline, and the Canadian government is understandably frustrated that the decision has been kicked further down the road. After the White House insinuated earlier this week that it might reject the pipeline, Prime Minister Stephen Harper threatened to take the oil elsewhere (via HotAir):

Canada could sell its oil to China and other overseas markets with or without approval of the Keystone XL oil pipeline in the United States, says Prime Minister Stephen Harper.

In a year-end television interview, Harper indicated he had doubts the $7-billion pipeline would receive political approval from U.S. President Barack Obama, and that Canada should be looking outside the United States for markets.

“I am very serious about selling our oil off this continent, selling our energy products off to Asia. I think we have to do that,” Harper said in the Monday interview with CTV National News.

Right now, there’s no avenue for Canada to get the oil to the Pacific for shipping, so any deal with China would be far down the road.

Proposals to build a pipeline extension to reach Canada’s West Coast are also likely to get major pushback from environmentalists. But it is possible. At Huffington Post Canada, Christopher Sands explains:

Canada’s best move now would be to quietly build the pipeline to the West Coast, regardless of the outcome of the U.S. 2012 elections or the progress of Keystone XL construction. Canada needs real options to avoid being repeatedly held captive to American political caprice. To earn U.S. respect and stop the bullying by environmental groups and politicians, Canada must turn its Keystone threats into credible promises, and act on them when necessary.

This would be a major disappointment, but it would be hard to blame Canada for taking that route. Let’s say Obama gets reelected, and the Keystone XL decision comes due in 2013. There’s a good chance Obama will approve the pipeline once he’s free of reelection constraints, but it’s far from certain. Who knows what the political dynamic will be like in a year?


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