‘Trains or pipelines,’ Doer warns U.S. over Keystone – by Shawn McCarthy (Globe and Mail – July 29, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

OTTAWA — Canada is telling the U.S administration it will see a sharp increase in cross-border crude-oil shipments by rail if President Barack Obama fails to approve the controversial Keystone XL pipeline.

In a telephone interview from Washington, Canadian Ambassador Gary Doer said oil companies are increasingly turning to trains – and even trucks – as the construction of pipelines has failed to keep up with the boom in North American crude production, and that trend will grow if the President turns down Keystone XL.

“His choice is to have it come down by a pipeline that he approves, or without his approval, it comes down on trains. That’s just the raw common sense of this thing, and we’ve been saying it for two years and we’ve been proven correct,” Mr. Doer said Sunday. “At the end of the day, it’s trains or pipelines.”

The ambassador made his comments to The Globe and Mail after Mr. Obama questioned the much-touted economic benefits of the $7.6-billion project in an interview published in the U.S. on the weekend. The President also suggested Canada could do more to reduce greenhouse-gas emissions to help win approval.

The risks of the growing volume of oil being shipped around North America by rail was highlighted this month with the derailment and explosion of a crude-carrying train in Lac-Mégantic, Que., killing 47 people. The U.S. Energy Information Administration says trains are now carrying nearly a million barrels a day of crude oil in North America, with volumes in Canada expected to more than double in the next two years.

In the interview with The New York Times, Mr. Obama fired back at Republican critics who said he could jump-start the U.S. economy by approving the pipeline project, which would stretch 2,500 kilometres and deliver oil from Alberta and Montana to a massive refining complex on the U.S. Gulf Coast.

Mr. Obama said Keystone would create only 2,000 construction jobs, which he described as a “blip relative to the need” for employment growth.

He reiterated his promise to evaluate the project on whether it “significantly” contributes to growing greenhouse-gas emissions. And he said Canada “could potentially do more to mitigate carbon release” from the oil sands. He acknowledged that there would be a benefit to increasing U.S. reliance on Canadian crude – from a “reliable ally,” as he put it – as opposed to imports from the Middle East or Venezuela.

Mr. Obama is not expected to make a decision on the project until the end of this year, despite efforts by Republicans in Congress to speed up the approval.

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