Keystone: Time to finally decide.
It’s about time to talk about the seemingly never-ending debate that has become the Keystone XL Pipeline project. The US Department of State announced that they will have reviewed TransCanada’s most recent application to have the project approved by first quarter of 2013. The Keystone pipeline is a proposed oil pipeline to deliver oil from the Athabasca oil sands to the US in a straight shot, to read more about the project check out these articles.
We haven’t heard much recently from the US as the presidential elections took place and no one wants to deal with such political tension. Now that Obama has settled back in it’s finally time to come down on one side of the argument. On the one hand, the unfortunate reality is people need energy. Both US and Canadian citizens rely on a consistent source of energy for their everyday lives; you need it to read this article right now. As far as oil reserves go, we’re essentially tied with Venezuela for runner ups to the Middle East oil deposits. What that means is that at some point the US is going to need more oil and either Canada or Venezuela will be there to supply it, and whoever does will be sitting in a comfortable financial situation.
Lets switch to the other side of the debate for a moment. In 2011 the most exported products from the US were gasoline, diesel fuel and jet fuel. In this light, as Canadians would we really want to sell our crude oil to the US only to buy back the refined product at a higher price? The idea of a cross-boundary pipeline is a topic of discussion in regards to another hot commodity: water. Building a water pipeline from Canada to the US is another highly debated topic, and whatever decision is made on Keystone will set precedence for cross-boundary policy. With a water pipeline the US could continue to supplement their intense virtual water trading business and sustain their exports, much of which comes to none other than Canada.
Regardless of the outcome of this most recent proposal, Canadian and US relations will be affected greatly. A strong reliance or independence will be determined, and the power to decide which seems to be in the hands of energy companies. A fundamental pitfall of these companies is to look at things on smaller time frames than many of the above mentioned consequences of Keystone will take to happen. So for now we must sit and wait for the US DOS to respond, biting our nails as the US is biding their time.