Pelosi Says Keystone Oil ‘Was Always Destined’ for Overseas Markets; Not So, Says Oil Industry

Elizabeth Harrington | January 19, 2012 | 12:00pm EST
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House Minority Leader Nancy Pelosi of Calif., gestures during a news conference on Capitol Hill in Washington, Thursday, Oct. 27, 2011, to caution the deficit reduction supercommittee about not using retirement benefits to fix the nation's debt problems. (AP Photo/J. Scott Applewhite)

( – At a news conference on Wednesday, House Minority Leader Nancy Pelosi (D-Calif.) was asked about President Obama's decision to reject the job-creating Keystone XL pipeline – a move that may prompt Canada to ship its oil to Chinese refineries instead of to those on the U.S. Gulf Coast.

Pelosi said the oil to be carried by the Keystone pipeline “was always destined for overseas.  It’s just a question of whether it leaves Canada by way of Canada or it leaves Canada by way of the United States. So, without taking a position on the pipeline, I don’t agree to the stipulation that this is oil that’s going to China now instead of the U.S.  It was always going overseas,” she said.

“It wasn’t for domestic consumption,” she repeated. “And that’s really an important point because the advertising is quite to the contrary.” Pelosi said the pipeline shouldn’t be built based on the assumption that the oil is staying in the U.S. – “because it isn’t.”

But the American Petroleum Institute, an industry trade group, told that 90 percent of fuel refined in the United States is used in this country.

“I don’t know where Nancy Pelosi gets her information from,” said Rayola Dougher, senior economic adviser for the American Petroleum Institute (API).  “I know that has been one of the talking points from the opposition here to the development of this project, but I cannot think of another project more in the national interest than something like this,” she said.

“We can certainly readily use it (the oil) here,” Dougher said.  “I have no doubt we’re going to be using it in the United States.”

According to API, the vast majority (over 90%) of transportation fuel refined in the U.S. is for use in the U.S.  The U.S. also is the world’s largest market for petroleum products, and the Gulf Coast has the world’s largest concentration of refineries.

TransCanada, which applied for a permit to extend its pipeline in 2008, argues that until the pipeline is completed, “the U.S. will continue to import millions of barrels of conflict oil from the Middle East and Venezuela.”

The 1,600-mile pipeline, if and when it’s completed, will bring crude oil from Hardisty, Alberta, through Montana, South Dakota, Nebraska, and Oklahoma to refineries in Port Arthur, Texas. President Obama on Wednesday formally denied a permit for the project, blaming Republicans for trying to rush him into a decision.

Last November, after a thorough, three-year review of the project, the State Department said it needed still more time to consider alternative routes. It moved the politically sensitive decision to 2013 – after the 2012 election. But in late December, Republicans passed legislation requiring the president to either issue or deny a permit within 60 days.

TransCanada says the Keystone XL has the capacity to deliver 830,000 barrels of oil per day to U.S. refineries in Cushing, Oklahoma and the Gulf of Mexico – something that “supports the desire in the United States to ultimately achieve domestic energy security.”

“Until this pipeline is constructed, the U.S. will continue to import millions of barrels of conflict oil from the Middle East and Venezuela and other foreign countries who do not share democratic values Canadians and Americans are privileged to have,” said Russ Girling, TransCanada’s president and chief executive officer, in a statement on Wednesday announcing that his company will reapply for a permit. 

“Thousands of jobs continue to hang in the balance if this project does not go forward.  This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed,” Girling said.

In regards to Pelosi’s statement that she does not agree with the stipulation that the oil will go to China, Dougher said, “She should talk to the Prime Minister of Canada, because he just said that yesterday.”

“Canada will continue to work to diversify its energy exports,” says a statement released by Canada’s Prime Minister Stephen Harper’s office.  Harper will make a trip to China next month, according to CNN.

As of yesterday, the Keystone project has been under review for 1,217 days, Dougher noted.

“It’s already been through the environmental reviews, there had been 14 different routes that had been looked at and decided on. The route that was planned was the best in terms of the environment; the Department of Energy has looked at it, 14 different agencies,” Dougher said.  “Already the process is twice as long as any other pipeline project.”

“The president’s only decision was, is this in the national interest,” she said.  “That’s the only thing he had to decide.”

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