Keystone’s delay hurts Ontario too – by Frank Dabbs, Special to QMI Agency (London Free Press – Novmeber 26, 2011)

London Free Press http://www.lfpress.com/

“What has changed, too, is the Canadian industry’s assumption
that environmental activism is just a nuisance with no major
political clout. … The issues that have ostensibly delayed
the pipeline are not the heart of the matter. Stopping $120
billion worth of oil-sands development over the next 25 years
is the object of the war.” (Frank Dobbs-London Free Press)

This month’s postponement of a decision on Trans Canada Corp.’s Keystone XL pipeline by U.S. President Barack Obama cynically removes a controversy from the 2012 presidential election agenda.

For Canada, including Ontario, it’s a game-changer that anti-oil sands activists are celebrating, but which has gob-smacked industry proponents.

What changed is the assurance of ready access to the U.S. crude-oil market. What has changed, too, is the Canadian industry’s assumption that environmental activism is just a nuisance with no major political clout.

The $7-billion Keystone project would ship bitumen and upgraded synthetic oil from the Alberta oil sands to refineries in Illinois and the Texas Gulf Coast, and the U.S. oil-distribution hub in Oklahoma. The oil would fill 5% of U.S. consumption and 9% of its imports.

The Canada-U.S. free-trade deal in 1998, the 1994 North American Free Trade Agreement, and Alberta and federal oil-sands royalty and tax changes in the mid-1990s, created stability for oil-sands development and set the stage for two decades of uninterrupted expansion.

Unfortunately, this regime wasn’t as legally firm and politically friendly as the Canada-U.S. Auto Pact, and the predictability ended with the Obama decision.

Oil-sands players are stung and reeling. It matters to Ontario because billions of dollars of business opportunities and thousands of jobs are at stake.

Obama, who depends on campaign cash from the same celebrities recruited to oppose the pipeline, can continue his aggressive political fundraising unimpeded by a controversy in a border state that won’t vote for him, anyway, next November.

The issue on the ground has been stopping pipeline construction through the ecologically fragile Nebraska sandhills across the headwaters of the Ogallala aquifer.

Sine 1956, however, Trans Canada has built, operated and expanded the continent’s largest natural-gas pipeline system through the Saskatchewan sandhills without damaging them.

And the Ogallala aquifer has been overused by population growth and is threatened by urban and farm pollution.

The issues that have ostensibly delayed the pipeline are not the heart of the matter. Stopping $120 billion worth of oil-sands development over the next 25 years is the object of the war.

The multi-million dollar campaign in the U.S. and Europe against the derisively labeled “tar sands” may rely on “exaggerated, misinformed and misleading” information, as Alberta Premier Alison Redford said bluntly in Washington, D.C.

But oil-sands companies and the Alberta government have been outspent and outsmarted.

The campaign against the oil sands, however flawed, has been more convincing than the case for oil sands.

That is where Ontario’s interests come into the picture.

At stake for Ontario for the next 25 years are more than 60,000 industrial jobs for oil-sands procurement, $60 billion in direct purchases of goods and the indirect benefit of $311 billion in federal taxes paid, according to the independent Canadian Energy Research Institute.

The CERI says Ontario is Canada’s biggest beneficiary outside Alberta of the planned $2.1 trillion in economic activity the oil sands will generate until 2035.

Six per cent of Canadian GDP and a quarter of its exports could come from the oil sands, boosting our economic health in troubled global times.

Oil-sands work now employs 2,300 Ontarians in this province.

At least as many other Ontarians — no one has an accurate count — work in oil-sands construction in Alberta.

Ontario’s interest in the oil sands began in 1975, when the province invested $100 million in the Syncrude oil-sands mine and upgrader, as part of a $600-million partnership with the federal and Alberta governments.

For the rest of this column, please go to the London Free Press website: http://www.lfpress.com/comment/2011/11/25/19020986.html

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