KXL rejection will diminish North American energy security: Prentice (National Post – March 14, 2013)

The National Post is Canada’s second largest national paper.

Excerpts from a speech given by Jim Prentice, Senior Executive Vice President and Vice Chairman of the Canadian Imperial Bank of Commerce, at the Financial Times Forum: Focus on Canada in New York

I am strongly of the view that President Obama should approve the Keystone XL pipeline on the basis that it is in the ‘national interest’ of the United States.

I say this because North America is accelerating towards a future of energy independence and the Canadian oil sands are an essential part of the North American energy marketplace.

That resource will afford both Canada and the United States security of supply and a consequential global competitive advantage for generations. That, in my view, is a prize worth seeking.

It is a pivotal and a volatile time for oil and gas producers – as new technology helps generate greater supply, and our continental relationship becomes increasingly exposed to, and influenced by, the global marketplace.

We are seeing the benefits of innovation not only in how we extract resources from the earth – but in how we reduce and limit the impact on our environment.

I begin, however, as any discussion about innovation must begin, with the market place itself, because it is free markets that are the cauldron of innovation.

As North Americans, we have been the beneficiaries of the world’s largest, most efficient and most prosperous energy marketplace. These markets have driven our prosperity on both sides of the border and perhaps, as of late, we have become complacent about their benefits.

What is most striking to me is the pace at which the North American energy market is responding to changes in the global market place. These markets are out pacing the capacity of even the most sophisticated analysts to predict outcomes.

Let me suggest just a few illustrations:

• Canada and the United States have increased their production of natural gas and now oil, far more quickly than had been forecast;

• Substitution of natural gas for other fuels, especially coal, is taking place in North America at a faster pace;

• Continental oil production has effectively displaced light, sweet crude imports into the United States, particularly those from Africa, again more quickly than had been predicted;

• Western Canadian upgraded syncrude and WCS related bitumen blends are poised to push aside heavy oil imports onto the continent from the Middle East, Mexico and Venezuela;

For the rest of this column, please go to the National Post website: http://business.financialpost.com/2013/03/14/kxl-rejection-will-diminish-north-american-energy-security-prentice/?__lsa=cbdf-0192

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