Harper 'disappointed' by Keystone pipeline delay

Delays on the U.S. side to assess the controversial Keystone XL pipeline proposal are a disappointment, Prime Minister Stephen Harper said, before heading to a meeting with U.S. President Barack Obama at the end of the Asia-Pacific Economic Co-operation summit.

"We have already indicated of course that we are disappointed," Harper told reporters in Hawaii, where the summit was held. "Nonetheless, I remain optimistic that the project will eventually go ahead because it makes eminent sense."

Obama reportedly told Harper that delaying the project until 2013 will ensure all questions are properly addressed, during their meeting Sunday. The prime minister also noted that Obama said a final decision had not been made.

Earlier in the day, Harper said the recent decision to delay construction of the $7-billion pipeline has been met with "extremely negative reaction" in the U.S. because the project is "obviously what's in the best interests of not just of the Canadian economy but also the American economy."

Harper also noted that the delay draws attention to Canada's need to access Asian markets for energy products.

Natural Resources Minister Joe Oliver told CBC News on Sunday the U.S. decision to put the project on hold pending an environmental-impact assessment will cost the Canadian company pushing the project.

Oliver said he expects the study ordered by the U.S. State Department "will be costly for" Calgary-based TransCanada Corp.

TransCanada is seeking to build the Keystone XL pipeline expansion from Hardisty, Alta., across the border to Nebraska, where it would meet up with an existing pipeline. Another new segment would run south to Port Arthur and Houston in Texas from Cushing, Okla.

The project has approval in Canada but is awaiting the go-ahead from U.S. officials. But that won't happen until late next year, at the earliest, following a State Department announcement Thursday that it wants to look into alternative routes for the pipeline's Nebraska portion due to environmental concerns.

"I think that this was disappointing, obviously, and it will be costly for the company. It will mean lost revenue for the province and delayed economic activity for the country," Oliver said.

He said it's unlikely TransCanada will abandon the Keystone XL project, however.

"I think if it’s delayed too long then the project could, you know, fall off. And the economic viability of any project could be undermined by excessive delay. I don’t think that we’re there yet, but this wasn’t helpful."

Environmentalists opposed Keystone XL because under its currently proposed path, it would run through sensitive ecological lands in the American Midwest, where any spill would be devastating.

Other opponents of the project say Canada should refine its oilsands crude domestically — and not effectively ship refining jobs and value-added processing to U.S. facilities in the Gulf of Mexico.

Oliver dismissed the environmental concerns, saying the Keystone XL plan had received an environment impact study in the U.S. and was more of a "local issue in Nebraska as much as anything."

The Keystone XL brouhaha highlights the need for Canada to find more buyers for its petroleum, the natural resources minister said.

"Basically all of our energy exports are currently going to the United States. We have one customer. So it is a major fundamental strategic objective of Canada to diversify our customer base," Oliver said.

"I was in China and Japan and I just got back yesterday. And let me tell you there’s a keen interest in our resources in both those countries. The Japanese are interested in our natural gas, the Chinese in our oil and gas."

Calgary-based pipeline operator Enbridge has plans afoot to build $5.5 billion in pipelines from Alberta to a port in Kitimat, B.C., to ship oil to East Asia.

But that project, called the Northern Gateway, is also hotly contested. It would run through aboriginal land and expose First Nations to possible devastation from any spill, which Enbridge has had several of lately in Michigan, Illinois and the Northwest Territories.

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Keystone pipeline clears major hurdle

The U.S. State Department's environmental analysis of TransCanada's proposed Keystone XL pipeline has given the project a thumbs up.

State Department officials say there's no indication the pipeline would spur further oilsands production or pose any significant risks to the six U.S. states that it will cut through, as it carries crude from northern Alberta to Gulf Coast refineries in Texas.

"It's not a decision," State Department official Kerri-Ann Jones explained during a conference call. "It's one piece of the information that will be considered."

The assessment moves the administration of President Barack Obama a step closer to a final decision on the pipeline. It now has 90 days to determine whether the controversial project is in the national interest of the United States.

Alberta's Energy Minister, Ron Liepert, says the province is pleased the report was balanced and based on facts, not emotions.

The U.S. needs a secure supply of affordable oil and the pipeline can deliver it, along with economic benefits from the $7 billion project, he said.

The decision isn't a surprise to the big U.S. environmental groups that are fighting the pipeline. An official for one group, the National Resources Defense Council, said State Department officials failed to conduct many of the studies the environmentalists were demanding.

Among them was an examination of whether Keystone XL could be rerouted to avoid environmentally sensitive areas in the U.S. Midwest, and to assess whether pipelines are prone to leaks.

The State Department decision comes as anti-pipeline activists continue a two-week civil disobedience campaign outside the White House.

More than 250 people, including Canadian actors Margot Kidder and Fort McMurray-born Tantoo Cardinal, have been arrested as they try to convince U.S. President Barack Obama to block the pipeline.

Keystone XL has become a lightning rod for the environmental movement in the U.S. in the aftermath of failed climate-change legislation last year.

Environmental activists say the project is a disaster waiting to happen and are opposed to Alberta's oilsands due to the high levels of greenhouse gas emissions involved in their production.

"This is not the rubberstamp for this project," said Jones, disputing several big American environmental groups who immediately decried it as such.

"The permit that is required for this project has not been approved or rejected at all … it should not be seen as a lean in any direction either for or against this pipeline. We are in a state of neutrality."

Proponents, meantime, say the pipeline will create thousands of jobs and help end U.S. reliance on Middle Eastern oil.

With files from CBC News Accessibility Links

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Burst oil pipeline allowed to restart

Alberta's energy regulator has given the final green light for the pipeline that spilled millions of litres of oil in the province's north to resume shipping crude.

The Energy Resources Conservation Board said Plains Midstream Canada, which owns the Rainbow pipeline, has completed all reviews and can safely operate with some restrictions.

The pipeline ruptured on April 28, spilling 4.5 million litres of oil.

The leak was caused by stress on a cracked weld and the company has agreed to eventually excavate and inspect all sections of the pipeline containing similar welds, the energy board said.

Plains Midstream said it will restart the 772-kilometre, 44-year-old line between Zama, Alta., and Edmonton on Tuesday. The 60-centimetre pipe is capable of moving 220,000 barrels of crude oil per day.

The board said that initially the pipeline will only be allowed to operate at 75 per cent of its maximum operating pressure.

The Rainbow pipeline leak contaminated 3.2 hectares of beaver ponds and muskeg in a densely forested area, Plains Midstream Canada vice-president Mike Halihan said in May.

Alberta Premier Ed Stelmach criticized the company at the time for its poor communications with the public including the Lubicon Cree, who live near the leak site.

With files from CBC News Accessibility Links

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