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US rejection of oil pipeline may re-shape oil markets
Published: 20 January, 2012, 17:39
Reuters / Joshua Roberts
TAGS: Conflict, Ecology, USA, Construction
President Barack Obama’s rejection of the Keystone XL pipeline may undermine US energy security and force Canada to look for new markets.
“Canada is already the largest and most secure crude oil supplier to the United States. However, the rejection of the pipeline is seen by the Canadian Government as proof that it cannot depend on just the US for it crude exports,” says Esa Ramasamy, Editorial Director at Platts, the energy information company.
Canadian Prime Minister Stephen Harper says he was “profoundly disappointed” by the decision. The 2700-kilometer pipeline was due to run from the oil sands of Alberta in Canada all the way to Texas, and would have cost 7 billion dollars to construct.
Now, Canada may look to export more of its oil to energy-hungry Asian economies, particularly China.
Obama did not reject the project outright, admitting that the refusal to give an environmental clearance to Keystone XL was largely the result of a tight approval deadline imposed on him by a hostile Congress.
“The Keystone XL project has a high probability of being commissioned, the question is when it will happen.” says Ramasamy.
TransCanada, the project owner, will now have to submit a totally new application for the pipeline to the US State Department, paving way for yet more environmental impact studies. Publically, it has stated that it hopes to complete the project by 2014, but investment bank FirstEnergy Capital says 2016 is a more realistic goal.
But even if the pipeline is salvaged Ramasamy sees the decision as a missed opportunity.
“The rejection of the project is clearly motivated by political factors, rather than economic, with the upcoming elections in the US in November 2012 playing a key role” he says. The majority of those who protested against the pipeline on environmental grounds are Democratic supporters, and Obama did not want to alienate them ahead of the presidential poll. Proponents of Keystone say he may have sacrificed tens of thousands of jobs and billions of dollars’ worth of investment for the sake of short-term popularity.
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Just another conspiracy theory: friends of Israel in the U.S. (AIPAC and others) know that a significant reduction in the U.S. dependence on oil from the Middle East would mean the end of the U.S. support for Israel, which would be the end of Israel.
I wonder if these people are behind the difficulties the U.S. has in developing alternative energy sources. Of course there are other groups, such as the military industrial complex and labor unions with members in the military industries, who profit from the wars the U.S. must fight in the Middle East to secure its oil supplies. These groups also see any reduction on ME oil as a threat to their well-being.The world will continue to use fossil fuels until the resources are depleted because that is how it works. When that happens, innovators will have developed alternatives.
The environmentalists position is much adieu about nothing that really matters. It is very arrogant of certain groups of human-kind to advance the position that man-kind is causing global warming. Fluctuations in global warming have and will exist until the end of time. This has been another venue for governments throughout the world to spend money needlessly and tax their people.
The U.S. has a history of not thinking things through and not planning well. I will, however, eventually approve the building of the Keystone XL.
"These groups also see any reduction on ME oil as a threat to their well-being."
in my previous post should have been
"These groups also see any reduction in dependence on ME oil as a threat to their well-being."