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Keystone ‘not in Canada’s best interests,’ NDP says

New Democratic Party MP Peter Julian, shown in 2012.

SEAN KILPATRICK/THE CANADIAN PRESS

Federal New Democrats staked their ground in opposition to the controversial Keystone XL pipeline, provoked a debate Thursday in the Commons with a motion Thursday that opposes the project on the grounds that it will send oil-industry processing jobs to the U.S. and therefore "is not in Canada's best interests."

NDP energy critic Peter Julian led the debate on an opposition motion, saying the oil-sands pipeline – which will ship bitumen to the U.S. Gulf Coast for processing – represents yet-another example of Canada failing to extract maximum economic benefits from its resources. The Liberals have joined the Harper government in supporting the Keystone XL project.

"We are simply giving away a resource without putting in place the smart economic policies that allow for the value-added jobs that need to come with that resource," Mr. Julian said. He added: "At the same time, we have a government that is absolutely obsessed with the idea that that is the only way for Canadians to prosper."

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The NDP MP said the party supports west-to-east pipelines that would result in Canadian crude being processed at refineries in Quebec and New Brunswick. However, it opposes both TransCanada Corp.'s Keystone XL and the Enbridge Inc.'s Northern Gateway pipeline because they would be designed to export raw bitumen.

A study by Informetrica Ltd. forecast that, for every 400,000 of bitumen shipped through the Keystone line, 18,000 processing jobs would be lost in Western Canada. That figures assumes however that, in the absence of the pipeline, companies would invest in upgraders and refineries in Alberta.

At the same time, Mr. Julian raised concerns about climate change and accused the government of failing to take action on reduce greenhouse-gas emissions. U.S. critics of the Keystone XL project contend it will speed development of the oil sands, and increase Canada's emissions of carbon dioxide.

Liberal MP Geoff Regan challenged Mr. Julian, saying the NDP's call for greater processing in Canada would, in fact, increase this country's emissions. Oil sands upgrader represent a major source of greenhouse gases in Alberta, and equipping Eastern Canadian refineries with the capacity to process bitumen would drive up their emissions.

"I am also concerned that the NDP want to manage the economy and make decisions for the private sector about where things should be done and so forth," Mr. Regan said.

A draft environmental impact study done for the U.S. State Department concluded that the construction of the Keystone XL pipeline would not increase oil-sands emissions, because companies would find other options and production would grow with or without the TransCanada line. Environmentalists have challenged that view and are keenly awaiting the publication of the State Department's final report – expected later this year – to see whether it maintains its earlier conclusion.

Conservative MP Kelly Block said the government believes the project will result in "hundreds of thousands of jobs" being created for Canadians. Ms. Block is parliamentary secretary for Natural Resources Minister Joe Oliver, and his office said the figure came from a report from the Calgary-based Canadian Energy Research Institute.

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But that figure would represent additional oil-sands production that would fill the Keystone pipeline, CERI director of research Dinara Millington said in an interview. The Conservative government subscribes to the State Department line that Keystone XL will have little impact on oil-sands production, a point reiterated by Ms. Block on Thursday.

So the actual Canadian jobs resulting from construction of a pipeline that would mainly be built in the United States would be modest.

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About the Author
Global Energy Reporter

Shawn McCarthy is an Ottawa-based, national business correspondent for The Globe and Mail, covering a global energy beat. He writes on various aspects of the international energy industry, from oil and gas production and refining, to the development of new technologies, to the business implications of climate-change regulations. More

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