SCENARIOS-US battle brews over Canada oil pipeline

Mon Nov 1, 2010 3:29pm GMT
 

By Timothy Gardner

WASHINGTON Nov 1 (Reuters) - A battle is brewing in the Obama administration over a proposed oil pipeline that could lock in Canada's place as the top crude exporter to the United States for 50 years.

The State Department is weighing whether the $7 billion Keystone XL pipeline would be necessary to bolster U.S. energy security as the oil would slash dependence on imports from Venezuela and Middle Eastern countries such as Saudi Arabia.

The Environmental Protection Agency, however, is worried about the greenhouse gas emissions from production of Canada's tarry oil sands and that the oil flow could undermine plans to make cars more efficient and to electrify more vehicles in coming decades.

Calgary-based TransCanada Corp (TRP.TO: Quote) hopes the pipeline, which would would bring oil from Canada to refineries in Texas and Louisiana, will start in early 2013.

Here are some possible paths the plan could take if it is eventually approved by the State Department, the White House, or perhaps President Barack Obama.

EASIEST PATH: STATE FINALIZES REVIEW, EPA SATISFIED

In July, the EPA asked the State Department to revise its environmental impact statement on the pipeline to consider greenhouse gas emissions, other environmental concerns, and pipeline safety.

Secretary of State Hillary Clinton hinted late last month her department was "inclined" to approve the line on energy security concerns. Since then a senior official there said approval is not a foregone conclusion. [ID:nN27272674]   Continued...

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