U.S. rejection of TransCanada Corp. (TRP)’s Keystone XL pipeline would be a “significant irritant” to the relationship between Canada and its biggest trading partner, said Canadian Trade MinisterEd Fast.
Fast said that he’s optimistic the project will be approved if the decision is made based on science and the economic benefits that it would bring to both countries.
“If the Keystone XL pipeline is turned down, clearly it would be a significant irritant to the Canada-U.S. relationship,” Fast said in an interview in Cali, Colombia. “That said, we will continue to be each other’s largest trading partners. There’s no doubt in my mind that the governments of both countries will continue to find new ways of deepening and expanding our trade relationship and using that relationship to drive prosperity in both of our countries.”
President Barack Obama’s administration is weighing whether the pipeline is in the U.S. national interest amid calls from environmental groups to kill it. The pipeline would help ease a glut of Canadian crude that the Bank of Canada says is crimping economic growth, as well as depressing prices for producers and cutting government revenue.
Fast said Canadian officials have been in touch with U.S. counterparts to ensure the government doesn’t make its decision based on “hysteria.”
“We know that environmental politics has played a role in disseminating misinformation of Keystone XL,” Fast said.
Environmental group 350.org released a letter this month from academics who say development of the oil sands would leave “no hope” of keeping global warming at a reasonable level.
Environmentalists say oil-sands operations release more carbon dioxide than most forms of conventional drilling. The Canadian government says the pipeline won’t increase emissions because the U.S. already imports heavy crude from countries such as Venezuela, producing similar levels of greenhouse gases.
Fast is in Colombia for a meeting of the Pacific Alliance trade bloc that consists of Mexico, Colombia, Peru and Chile. Canada, which has free-trade agreements with all four nations, is an observer to the talks and hasn’t made any decision about joining, Fast said.
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