The U.S. government must decide whether it wants more oil from Canada or wants to continue relying on high levels of supplies from the Middle East and Venezuela, the Canadian ambassador to the United States said Wednesday while in San Antonio.
If San Antonio-based Valero Energy Corp. could decide, the refining company would select the Canada option, using the proposed Keystone XL pipeline, Valero Vice President Jim Greenwood said.
As proposed, the Keystone pipeline would stretch from northeastern Alberta, Canada, to the Houston-Port Arthur refinery region.
Canadian ambassador Gary Doer spoke at a Wednesday luncheon sponsored by Greater San Antonio Chamber of Commerce, chaired by Greenwood. Doer told the audience of about 160 people that Canada believes the Obama administration should more forward on the pipeline project "on its merits."
Doer told the audience that Canada believes the Obama administration should more forward on the pipeline project "on its merits."
On Jan. 18, President Barack Obama said the U.S. government was rejecting the Trans-Canada Corp. pipeline application because environmental studies could not be completed by a deadline imposed by a December law extending the U.S. payroll tax reduction.
TransCanada is widely expected to re-apply for approval. Greenwood said the Jan. 18 announcement was "a decision not to make a decision" for now.
Despite the rejection, Doer remains confident. "We're going to get it done," Doer said.
The $7 billion pipeline would deliver between 435,000 and 590,000 barrels of oil per day from Alberta's oil sands to refineries in Illinois and on the Texas coast. The pipeline also could deliver to refineries the oil being extracted from shale formations in North Dakota and Montana.
Doer told San Antonio Express-News editors before the luncheon that Canada Prime Minister Stephen Harper will visit China next week. "Oil will be on the agenda," Doer said.
China and India are possible customers for Canadian oil if the project is canceled and U.S. companies cannot take delivery, the ambassador said.
"We have a resource the world wants. We are going to develop our options. We're not going to stand still while others stand still," Doer said.
U.S. critics of the pipeline project say it would come with a high environmental toll, leaving behind toxic sludge ponds and destroyed forests while producing large amounts of gases linked to climate change.
But opposition from environmentalists is countered by support from labor organizations seeking the thousands of jobs that would result from pipeline construction and at refineries and companies making pipeline construction equipment, motors and pumps, Doer said.
In addition, "we want to assure that national security is part of the debate, too," Doer said. "We believe the Keystone pipeline fits into energy independence for the United States."
Valero has planned since 2008 to purchase and refine Canadian oil and is expanding its Port Arthur refinery.
"The pipeline would bring the heavier crude that we are finding less of in the world, from Mexico and Venezuela, which is of volatile reliability," Greenwood said. "We want to assure we have a supply from a partner in North America and not be subjected to the whims of geopolitical chaos ... The project is now in limbo. We feel eventually it will get built."
Copyright 2012 San Antonio Express-News. All Rights Reserved.
(Originally published February 2, 2012, in the San Antonio Express-News.)