Harper Says U.S. Approval of Keystone Pipeline ‘No Brainer’

Canadian Prime Minister Stephen Harper said U.S. approval of TransCanada Corp.’s proposed $7 billion Keystone XL pipeline is a “no-brainer” because it will create jobs and add to America’s secure energy reserves.

“The need for energy in the U.S. is enormous, the alternatives for the U.S. are not good, on every level,” Harper said in an interview on Bloomberg Television. Harper said he’s “confident” the pipeline will be built.

The U.S. may make a final decision on the project this year after the State Department said Aug. 26 it would pose “no significant impacts to most resources” along its route. Environmental groups, along with Hollywood celebrities such as Daryl Hannah, have opposed the pipeline, calling the oil sands a source of “dirty oil.”

Keystone would link Canada’s oil sands to U.S. refineries on the Gulf of Mexico coast. The 2,673-kilometer (1,661-mile) pipeline would begin in Hardisty, Alberta, and cross Saskatchewan, Montana, South Dakota and Nebraska.

Harper has promoted Canada as an “energy superpower,” pointing to its political stability compared with other suppliers. Canada is the biggest foreign supplier of oil to the U.S., and provides the country with almost a quarter of its crude imports, twice what Saudi Arabia does.

Energy Security

“We agree with the Prime Minister’s comments -- it’s what we have been saying all along,” Terry Cunha, a TransCanada spokesman, said in an e-mailed response to questions. “Keystone XL will ensure energy security for the U.S and create 20,000 jobs and 118,000 spinoff jobs during this current economic climate without any government subsidy.” The company still expects a decision from the Department of State by the end of the year, he said.

Resistance to the Keystone project is one reason Canada needs to seek out partners such as China for exports of energy and other products, Harper said.

“Canada should look at trade diversification and particularly diversification of energy exports,” he said. The U.S. buys three-quarters of Canada’s exports, and a drop in those shipments helped push Canada into its last recession.

“We would like to see the trade dependence on the United States fall, and it has been falling gradually,” Harper said.

Most trade with the U.S. is smooth even if Canadians often focus on disagreements such as President Barack Obama’s jobs bill with a “Buy American” provision, Harper said.

‘Great Friends’

Asked if the U.S. should be concerned about Canada seeking other markets, Harper said “Canada is a democratic country, the ultimate friend of the United States and a market-based player.”

“We don’t use oil or energy projects as strategic resources to achieve foreign policy or political ends, and of course we would never do that to our great friends in the United States,” he said.

Harper, 52, won his first majority government in May elections promising to balance Canada’s budget by the fiscal year that begins April 2014. The Conservative Party led by Harper won re-election after having been in government with a minority of seats in Parliament since 2006.

On the global economy, Harper said policy makers from major countries should be able to avoid another recession and solve the most immediate threat posed by Europe’s sovereign-debt crisis.

‘Muddle Through’

“We need to see some real solutions that are going to last and move us forward,” Harper said in reference to Europe. “I still think there is every opportunity for governments to muddle through and keep the recovery going, although admittedly we are looking at a period of very low growth.”

The rise in Canada’s dollar against the U.S. dollar in recent years has been another drag on Canada’s economy, Harper said.

“There are some clouds and one of them is the upward pressure on the dollar creates some practical problems for Canadian producers,” he said.

The Canadian currency, known as the loonie because of the image of the aquatic bird on the C$1 coin, depreciated 0.8 percent to C$1.0005 per U.S. dollar at 1:06 p.m. in Toronto.