Neil Young Says Keystone XL Terrible Idea

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Welders work on a joint between two sections of pipe during construction of the Gulf Coast Project pipeline in Prague, Oklahoma. Close

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Photographer: Daniel Acker/Bloomberg

Welders work on a joint between two sections of pipe during construction of the Gulf Coast Project pipeline in Prague, Oklahoma.

TransCanada Corp. (TRP)’s proposed Keystone XL oil pipeline is a “terrible idea” that won’t benefit anyone, Canadian musician Neil Young said.

“This fuel is all going to China, which is probably the dirtiest place on the planet,” Young told reporters before a concert in Winnipeg, Manitoba, yesterday.

Young, who formed his first bands in the city and was inducted into the Rock and Roll Hall of Fame in 1995, is on tour to raise money for the Athabasca Chipewyan First Nation, which is fighting to stop oil-sands expansion on their traditional lands. His tour comes as President Barack Obama’s government weighs whether to approve TransCanada’s $5.4 billion link between Alberta’s oil sands and the U.S. Gulf Coast as production in the province surges.

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Canadian oil-sands output is set to rise to 4.5 million barrels a day by 2025, more than double a decade earlier, according to a forecast from the Canadian Association of Petroleum Producers (CAPP). The U.S. State Department is preparing a final version of an environmental review that will assess whether Keystone would contribute to greenhouse-gas emissions that scientists say are warming the planet.

The musician said parts of Alberta will “look like the moon” if Canada doesn’t move to preserve land.

‘Huge Mess’

Over the Rails and Through the Pipes

“It is like a war zone, a disaster area,” Young said at Winnipeg’s Centennial Concert Hall, hours before he was to take the stage.

Almost all of Canada’s oil exports are shipped to the U.S., according to the National Energy Board, an independent regulatory agency. Last year, only conventional light oil was exported from Canada outside North America, according to the agency.

The Athabasca Chipewyan First Nation, located about 200 kilometers (124 miles) from oil sands in Alberta, claims continued development violates its treaty rights and contaminates waterways and food systems, according to its website. The First Nation, as aboriginal groups are also called in Canada, is challenging Royal Dutch Shell Plc (RDSA)’s Jackpine oil-sands mine expansion, the proposed Pierre River mine and an Alberta land use plan.

Canada has made a “huge mess” in dealing with aboriginals, Young said.

“The integrity of Canada is at stake,” he said. “When you make a deal, you’ve got to stick with the deal you’ve made.”

‘Inflammatory Rhetoric’

The Athabasca Chipewyan First Nation is in favour of economic development as long as it is done in a reasonable and sustainable way, Chief Allan Adam said at the press conference yesterday with Young. The federal and provincial governments need to consult with First Nations when development is occurring on their traditional lands where they hunt, fish and gather food, he said.

“Our treaties are being broken in more ways than one,” Allan said.

Young’s statements demonstrate his lack of understanding of the oil sands and the realities of North America’s energy mix, according to a statement released yesterday by CAPP, which represents companies that produce 90 percent of Canada’s natural gas and crude oil. Canadians need constructive dialog about energy matters based on facts rather than “ill-informed opinions and inflammatory rhetoric from protest-anthem rock stars,” the group said in a statement.

Output Rising

Oil sands production is set to surge in the coming decade with companies including Shell, Suncor Energy Inc. (SU), Cenovus Energy Inc. (CVE) racing to boost output with industry-wide investments of more than C$20 billion annually, according to data from CAPP.

Impacts include wastewater, used in mining bitumen, destruction of wildlife habitat and air pollution, according to environmental think-tank Pembina Institute.

It’s impossible for new resource development projects to proceed in Canada without appropriate consultation and accommodation for aboriginal groups, Gordon Nettleton, a partner at McCarthy Tetrault LLP in Calgary, who has represented energy companies in discussions with native groups, said in a phone interview.

“The reality that Neil Young probably doesn’t know and understand is that whenever resource development happens in the oil sands, it’s common if not first practice to have First Nations enter into confidential impact-benefit agreements in some way, shape or form, with resource developers,” Nettleton said.

Support Declines

Canadian support for Keystone XL has declined to 52 percent in December from 68 percent in April, while opposition has increased to 40 percent from 28 percent, according to a poll released Jan. 15 by Nanos Research Group. The survey of 1,000 Canadians taken between Dec. 14 and Dec. 16 has a margin of error of 3.1 percentage points, according to the Ottawa-based agency.

To contact the reporter on this story: Jen Skerritt in Winnipeg at jskerritt1@bloomberg.net

To contact the editor responsible for this story: Millie Munshi at mmunshi@bloomberg.net

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