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Politics Keystone fight highlights need to diversify, Rickford says

Canadian Natural Resources Minister Greg Rickford speaks about Keystone XL pipeline during a news conference at the Canadian Embassy in Washington, Wednesday, Jan. 14, 2015.

Jacquelyn Martin/AP

Natural Resources Minister Greg Rickford says the Canadian government has already learned a powerful lesson from President Barack Obama's long-delayed decision on the controversial Keystone XL pipeline – that it carve out alternate routes to world markets for Alberta's vast oil sands reserves.

"If Keystone represents something aside from an infrastructure project, it is that 99 per cent of our oil and 98 per cent of our gas is being sold to the United States and that reminds us we would be in a better position over all if we had other customers," Mr. Rickford said at the end of a two-day visit during which he lobbied members of U.S. Congress on behalf of TransCanada Corp.'s $8-billion project to funnel oil sands crude to Texas Gulf Coast refineries and ports.

Mr. Rickford maintains he still expects Mr. Obama to approve Keystone XL despite the President's decidedly negative comments in recent weeks, when he has pointedly said the pipeline may be good for Canada but bring little or no benefits to U.S. consumers.

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"As the eternal positive guy, I think this project is going to be approved," Mr. Rickford said.

The long delay in U.S. decision-making – it has been six years since TransCanada first applied for the presidential permit needed for a transborder pipeline – has increasingly forced Alberta's crude producers to use rail to get the product to market. Meanwhile, major pipeline proposals in Canada to send oil sands crude to East and West Coast ports for export face stiff opposition and are years away.

"There is no question that Keystone XL reminds us in Canada … that we have to get our energy products to our own tidewaters," Mr. Rickford said at a news conference at the Canadian embassy in Washington before heading to Houston.

But when pressed about Mr. Obama's negative comments concerning Keystone XL, Mr. Rickford steered clear, saying he wasn't going to be drawn into the current political showdown between the Republican majorities in Congress and a President who has vowed to veto any attempt to wrest control of the decision away from him.

Just before Christmas, in his last substantive comment about Keystone XL, Mr. Obama said: "Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else."

While Keystone XL advocates, including Mr. Rickford, still say they are optimistic that Mr. Obama will eventually approve the project, the reality is that Canada has no real alternative to get Alberta crude to overseas markets if the President says 'No.'

"Market diversification is an imperative for Canada," Mr. Rickford said, adding: "There are markets in the Pacific basin that want it [Canadian oil sands crude], in China and Japan," as well as European nations, including Ukraine where they hope Canada may be able to supply their needs for oil and gas.

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For years, Canadian ministers have said they expect a decision soon but Mr. Rickford held out renewed hope that the Obama administration has run out of reasons for further delay. With the issue of whether TransCanada has a lawful route permit in Nebraska apparently concluded – although further litigation is possible – the State Department review process can be concluded.

"We hope that process comes to a conclusion sooner rather than later," Mr. Rickford said, noting that Secretary of State John Kerry publicly said he wanted that to happen.

However, the final decision will be made in the Oval Office. Opponents of Keystone XL, including most of the major environmental groups who claim the pipeline will spur development of carbon-laden Alberta crude and contribute significantly to greenhouse gas emissions, have managed to turn the project into a test of Mr. Obama's credibility on fighting climate change.

The Canadian government has long dismissed that claim, contending that Keystone XL is an environmentally responsible and safe means of moving crude to market and – that one way or another – that crude will get to market.

"Every piece of evidence seems to suggest that approval is the right decision, so that has given us confidence that based on science and facts that at some point this project will be approved," Mr. Rickford said. "A majority of Americans support this project and that's manifest in the Congress."

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