Ahead of Canadian leader’s visit, oil industry calls for pipeline project approval

“In particular, Canadian oil sands will support significant U.S. economic growth and job creation, provided the pipelines necessary to transport this vital resource are approved. On behalf of the American Petroleum Institute, therefore, I ask that you approve the Keystone XL Pipeline,” API President Jack Gerard said in the letter.

API cites a recent Department of Energy report that says the pipeline project could reduce the country’s reliance on Middle East oil.

The Hill reported Thursday night that environmental groups are calling on the Obama administration to reject the pipeline project ahead of the Obama-Harper meeting Friday.

In a letter sent to Obama Friday, the groups — which include Environment America, the Sierra Club and the Natural Resources Defense Council — said, “This dangerous and expensive pipeline would double our reliance on Canada’s high carbon and destructive tar sands oil and send it for the first time in significant volumes to refineries on the U.S. Gulf Coast.”

Here is the full text of the oil industry letter:

February 3, 2011

The President
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500

Dear Mr. President,

As you meet with Canadian Prime Minister Stephen Harper tomorrow, we urge you to consider the strong partnership the U.S. has with Canada—the world’s biggest trading relationship—and the role Canada’s oil can play in our energy and economic security. In particular, Canadian oil sands will support significant U.S. economic growth and job creation, provided the pipelines necessary to transport this vital resource are approved. On behalf of the American Petroleum Institute (API), therefore, I ask that you approve the Keystone XL Pipeline.

The economic impact of oil sands development in neighboring Canada is expected to lead to the creation of more than 342,000 new U.S. jobs between 2011 and 2015 and add an estimated $34 billion to U.S. gross domestic product in 2015, according to the Canadian Energy Research Institute.

Many U.S. jobs already rely on Canadian oil sands exploration and production. A recent analysis by the Canadian Association of Petroleum Producers found almost 1000 U.S. companies in 47 states are suppliers of materials, equipment, training, consulting or inspection services to support Canadian oil sands production operations: from Apopka, Florida, to Norwich, New York and San Francisco, California. This was a preliminary analysis and the actual number of U.S. companies—and the jobs for Americans it entails—is likely far larger.

Mr. President, the U.S. Department of Energy (DOE) provides further support for the Keystone pipeline. Among the findings of the DOE study released this week and commissioned for the State Department’s pending environmental review of the Keystone XL Presidential Permit application, are the following:

Construction of this pipeline would not change global refinery CO2 and total lifecycle greenhouse gas emissions.

The two main options for Western Canadian oil exports are to increase distribution to the U.S. or ship crude to China.

Increases in U.S. imports of Canadian crude reduce other foreign oil imports and wealth transfers to outside North America.

In addition, the Energy Policy Research Institute Foundation found that “denial of access to the U.S. market would result in an aggressive program to ship the resource to alternative markets.”

API members are among the largest investors in zero- and low-carbon emitting energy technologies, but the reality is that oil will be a critical part of the world’s energy equation for decades to come. The International Energy Agency projects global oil demand to increase 28 percent above 2009 levels by 2035. With increasing global demand, Canada will find a market for its oil. And to meet our own energy demands the U.S. will need to import crude and petroleum products in addition to accessing our domestic resources.

Other countries are securing their energy futures and we need to do the same. Canada is our top supplier of imported oil and is already filling the gaps being created by production declines from Venezuela and Mexico. Estimates suggest Canada could provide up to 40 percent of our total oil imports by 2035.

The Council on Foreign Relations underlined the value of close ties with a friendly, neighboring country that does a lot of business with the U.S., noting that “a greater fraction of money used to buy Canadian oil will likely later be spent directly on U.S. goods and services and hence contribute directly to U.S. growth.”

API represents more than 450 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports more than 9.2 million U.S. jobs and 7.5 percent of the U.S. economy, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

Mr. President, we ask you to engage with Prime Minister Harper during his visit to the White House on the issue of oil sands and the Keystone XL pipeline. We will gladly provide you and your administration any information or answer any questions regarding the economic and energy security benefits Canadian oil sands provide American consumers.

Sincerely,

Jack Gerard