Keystone’s rejection will see Alberta government increase efforts to find new bitumen markets

EDMONTON - The Alberta government will broaden lobbying efforts in support of the controversial Keystone XL pipeline while putting new emphasis on securing inter-provincial and Asian export routes, officials said Thursday.

One day after the Obama administration rejected TransCanada’s application for a pipeline that would carry Alberta bitumen to refineries on the U.S. Gulf coast, Alberta International Affairs Minister Cal Dallas said the province will redouble efforts to talk to Washington lawmakers and begin to reach out to business and labour groups.

Dallas said the government is also open to discussions with environmental groups that want to talk about environmental stewardship in the oilsands, but that officials won’t engage with groups that dismiss the need for oil altogether.

“We all recognize there are some groups and individuals that don’t believe there is a productive future for oil, and that it’s not necessary,” Dallas said.

“We are clearly committed to developing this resource. We know there is a market for it, and we are certainly prepared to have discussions around the responsibilities and the activities around how we develop that resource. But in the context of groups that have no interest in that dialogue? No, there won’t be a lot of outreach there.”

Dallas said the province will continue to “raise the bar” in mitigating the environmental impact of the oilsands and that both he and Redford will travel to Washington in coming months to make Alberta’s case.

The Obama administration rejection of the proposal came after months of growing opposition to the pipeline from environmental groups, legislators and landowners in Nebraska, where the proposed pipeline travels through ecologically sensitive territory.

Obama in November delayed the decision, saying the pipeline “could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process.”

Obama on Wednesday said the decision to to reject the proposal was not based on the technical merits of the project, but rather because Republicans in Congress set a “rushed and arbitrary” deadline that did not allow for proper evaluation of the project.

“The biggest part of the story is simply that there are some real tough hardball politics going on between the Democrats in the White House and the Republicans in Congress, and the Keystone XL pipeline got caught in the middle,” Alberta Energy Minister Ted Morton said. “It’s politics trumping economics.”

Morton said he and Redford will work more closely with their Canadian federal counterparts to push for approval in coming months, and that Albertans will see an expansion of provincial efforts in Washington.

While he is confident Keystone will eventually be approved, he also said the province will renew its focus on inter-provincial and Asian exports as a result of the decision.

“The delay has certainly been a catalyst for market diversification becoming a higher priority,” Morton said. “That certainly would include Eastern Canada.”

Morton said Alberta currently produces roughly 2.3 million barrels of crude oil a day. Of that, the province exports 1.8 million barrels, of which 76 per cent goes to the United States. However, 20 per cent already goes to other provinces, primarily in the East.

Morton said Enbridge is already working to get a Toronto-Montreal pipeline to carry Alberta bitumen to upgraders in Quebec, and that Irving Oil has expressed interest bring bitumen to the Maritimes.

Dave Bronconnier, Alberta’s envoy in Washington, said he is working with Canadian Ambassador Gary Doer and the U.S. State Department to determine what the second Keystone XL application should look like.

“The mission here in Washington is to keep doing what we have done,” Bronconnier said. “The U.S. needs Canadian energy, there’s no question about it, and Canada needs markets. Our job is to keep the outreach program going and to expand that outreach.”

Bronconnier said the province will continue focusing its efforts on key decision-makers without interfering in domestic politics. He said the province would have a tough time reaching Americans directly to refute the “outlandish” and “patently untrue” claims made by U.S. environmental organizations, because Alberta’s spending on lobbying is just “a drop in the bucket” by American standards, he said.

Lobbying disclosure reports released by the U.S. Senate Office of Public Records show the province paid lobby firm Nelson Mullins $180,000 in 2011, up from $100,000 in 2010. The reports, made public by the Center for Responsive Politics, also show Alberta Energy spent $70,000 lobbing in 2011, up from $50,000 in 2010.

TransCanada’s parent company and its subsidiaries spent $1.3 million lobbying in the United States last year, nearly double the $720,000 the company spent in 2010.

TransCanada Spokesman Terry Cunha said the company is committed to re-submitting its Keystone application, but is still reviewing the decision and hasn’t decided on its strategy.

“The fundamental issues is that the U.S. is still very reliant on fossil fuels and they have to decide where they want them to come from,” Cunha said.

“The U.S. has a very important decision to make.”

kkleiss@edmontonjournal.com

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