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Alberta premier: US pipeline rejection would hurt

Wednesday - 4/10/2013, 8:49pm  ET

BY ROB GILLIES
Associated Press

TORONTO (AP) -- If the Obama administration rejects the Keystone XL pipeline, it would be a significant thorn in Canadian-U.S. relations, Alberta's premier said Wednesday.

Premier Alison Redford was in Washington for her fourth trip to lobby on behalf of a pipeline that Canada sees as critical to its economic well-being. The Obama administration is considering whether to approve the pipeline, which would carry 800,000 barrels of oil a day from Alberta across six U.S. states to the Texas Gulf Coast, which has numerous refineries. A decision is expected later this summer.

"It would become something that we would continue to talk about," Redford said of a possible rejection during a telephone interview with The Associated Press. "It would be a continuing issue."

The pipeline has become a flashpoint in the U.S. debate over climate change. Republicans and business and labor groups have urged the Obama administration to approve the pipeline as a source of much-needed jobs and a step toward North American energy independence. Environmental groups have been pressuring President Barack Obama to reject the pipeline, saying it would carry "dirty oil" that contributes to global warming. They also worry about a spill.

Obama's initial rejection of the pipeline last year went over badly in Canada, which relies on the U.S. for 97 percent of its energy exports.

The pipeline is critical to Canada, which needs infrastructure in place to export its growing oil sands production from northern Alberta. The region has the world's third largest oil reserves, with 170 billion barrels of proven reserves. Daily production of 1.5 million barrels from the oil sands is expected to increase to 3.7 million in 2025. Only Saudi Arabia and Venezuela have more reserves.

A lack of pipelines and a bottleneck of oil in the U.S. Midwest have reduced the price of Canadian crude and have cost oil producers and the federal and Alberta government billions in revenue. Canada's central bank estimated lower prices for Canada's crude reduced annualized real GDP growth by 0.4
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