U.S. as Crude Competitor Drives Canada Need to Reach Asia

Canadian Natural Resources Minister Joe Oliver said the prospect of the U.S. becoming the world’s biggest crude producer will transform it from a customer into a “competitor,” underscoring the need to build Canadian pipelines to reach Asian markets.

Oliver, speaking today in Vancouver, said U.S. dependence on imported oil will decline as production increases from unconventional extraction methods and domestic demand falls. The International Energy Agency said in a report last month that U.S. output would overtake Russia and Saudi Arabia by 2015.

“Our only customer will become a competitor,” Oliver said today in the prepared text of a speech provided by his office. Growth in demand for energy in the Asia-Pacific creates an “enormous economic opportunity,” he said.

The Canadian government has been lobbying for U.S. approval of TransCanada Corp (TRP)’s Keystone XL pipeline, which would carry crude from Alberta’s oil sands to the U.S. Gulf Coast. Meanwhile, Canadian regulators face a deadline of the end of this year on Enbridge Inc. (ENB)’s Northern Gateway pipeline, which would ship crude to the country’s west coast for sale to Asian markets.

Oliver said the government has taken a number of steps to prevent spills from crude tankers, such as increased inspections. “The bottom line is that no project will proceed unless it is safe for Canadians and safe for the environment.”

He said the government will release a report by Doug Eyford, a special representative to Prime Minister Stephen Harper, that will make recommendations on how to consult aboriginal groups on energy infrastructure projects.

To contact the reporters on this story: Christopher Donville in Vancouver at cjdonville@bloomberg.net; Andrew Mayeda in Ottawa at amayeda@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.