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Prime Minister Stephen Harper takes part in a roundtable discussion at the New York Stock Exchange on Sept. 21, 2011.Ryan Remiorz/The Canadian Press

Prime Minister Stephen Harper says U.S. approval of a new oil sands pipeline should be a "no-brainer" given that country's demand for energy and its unpalatable alternatives to Canadian oil.

In New York for the opening of the United Nations General Assembly, the Prime Minister was asked by an American reporter about the future of TransCanada Corp.'s Keystone XL pipeline, which will transport 700,000 barrels per day of oil sands bitumen from Alberta to the Gulf Coast refinery hub.

The State Department is now determining whether the pipeline would be in the U.S. national interest, and is widely expected to approve the project despite noisy opposition from activists and some American politicians who worry about its environmental impact.

"It's hard for me to imagine that the eventual decision would be not to build that," Mr. Harper told Bloomberg Television. "The economic case is so overwhelming. The number of jobs that would be created on both sides of the border is simply enormous. The need for the energy in the United States is enormous."

And he said the alternatives to increased Canadian imports are "not good." The Canadian government and oil industry have argued that the Americans would be better served purchasing crude from their friendly, democratic neighbours than undemocratic, conflict-ridden countries in the Middle East.

The line of reasoning has sparked a war of words between Ottawa and the Kingdom of Saudi Arabia, which has complained about an attack ad produced by a pro-industry group that has close ties to the Conservative government.

Environmental groups say the choice is not Saudi Arabia versus Canada, but growing dependence on oil sands bitumen versus a cleaner energy future.

The Prime Minister said the fact that there are still questions about a decision that should be a "complete no-brainer" is encouraging Canada to pursue other export markets for oil and gas.

It's "all the more reason why Canada should look at trade diversification and particularly diversification of energy exports," he said.

The federal government has broadly endorsed the oil industry's efforts to build new pipelines to the West Coast to open up new markets in Asia.

The National Energy Board is reviewing plans for a natural gas pipeline to Kitimat, B.C., and a plant to liquefy the gas so it can be exported via tanker. The NEB and Canadian Environmental Assessment Agency are holding a joint review of Enbridge Inc.'s more controversial Northern Gateway oil pipeline to the coast. The Gateway project is opposed by environmental groups and first nations, whose traditional lands would be affected.

U.S. activists staged a protest in front of the White House earlier this month, and a number of celebrities were arrested for refusing to disperse. Environmental groups are planning a similar demonstration in Ottawa next week.

The union that represents many of the workers in Alberta's oil patch will be on Parliament Hill on Thursday to ask politicians to oppose a pipeline that will carry bitumen to the southern United States for processing.

Although the pipeline would be exporting bitumen extracted in Canada, it is a job killer, said Dave Cole, the president of the Communications, Energy and Paperworkers Union of Canada,

His workers, he said, do the job of upgrading the bitumen here in Canada before it becomes oil. But, if the pipeline goes through, that upgrading will be done in the United States.

"The Americans will get the jobs and Albertans, Canadians will get the pollution," Mr. Cole said. "It is wrong-headed for the economy of Canada."