Monday, November 14, 2011

XL eyeing the West Coast

Because of political pressures (in my view largely warranted) the XL Keystone pipeline to the US is now off the table until 2013 -- a redesign to avoid the Western U.S. largest aquifer that feeds 4 or 5 states with all their drinking water (it is also very close to the surface -- so at great risk when there is a spill).  That TransCanada didn't first consider this route shows the serious lack of understanding of environmentalist's often very justified concerns.   The second error was to over-estimate the number of jobs created.  Reading some of the more "pro-oil" crew it was anywhere between 20,000 and 100,000 new jobs, would be created by the building of the pipeline.  How the highly automated construction of a pipeline could require 20,000 employee begged to be questioned.  XL Keystone has now admitted (on the record) that it's a few hundred jobs that will be created.  So the XL Keystone pipeline will not be an engine of growth...

Canada's solution is to built a pipeline to the West Coast (some real challenges there too) that will feed the oil to Asia and other parts of the world here.  

The NAFTA agreement set out the percentage of oil Canada produces that is to be sold to the U.S. -- a kind of "security" agreement (Canadians have no issue with selling to America), but this new shift with the pipeline going West (instead of South) will have implication for America.  Currently 22% of America's oil needs are from Canada, the XL pipeline would have increased this to nearly 30%.  Clearly America prefers oil from Venezuela, Nigeria, Iraq -- all people who "love America".


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