Canadian pipeline’s approval a reminder of what U.S. is missing

July 17, 2014 By    

The Canadian government approved a pipeline June 17 that will move oil from Alberta, Canada, to the Pacific Coast, where it will be shipped to Asia.

Why is the development of this pipeline, Enbridge Inc.’s $6.5 billion Northern Gateway Pipeline, noteworthy? Well, the answer starts with the fact that the Northern Gateway is now positioned to move oil from a plentiful region where TransCanada has been trying for years to move oil into the United States via the proposed Keystone XL Pipeline.

Keystone, of course, is not a propane pipeline. But some people in the propane industry are counting on Keystone to bear the brunt of oil shipments that other delivery systems (i.e. rail) currently manage – if it’s ever put online.

“Taking pressure off [oil] is going to help us,” said Roger Leider, executive director of the Minnesota Propane Association, in a meeting with the office of Rep. Collin Peterson, D-Minn., during Propane Days 2014.

With the closure of the Cochin Pipeline, which accounted for about 40 percent of Minnesota’s propane supply, the propane industry is in search of alternative delivery systems. Rail is the obvious answer. But rail companies only have so many railcars, and their systems can handle only so much volume.

Shifting some of rail’s oil to Keystone would potentially free up rail space for more propane. And that’s a good thing.

But while Canada has taken it upon itself to green light the Northern Gateway Pipeline, the United States, specifically the Obama administration, remains idle on Keystone.

“They say in Canada being a neighbor with the U.S. is like sleeping with an elephant,” said Charles Krauthammer, a Washington Post columnist and a regular contributor to Fox News, in remarks at Propane Days. “[President Barack] Obama doesn’t want to say no [to the pipeline]. He doesn’t want to do it before the next election.”

Former Vice President Al Gore agrees with Krauthammer that Obama will not approve Keystone. In the June 18 edition of Rolling Stone, Gore writes that Obama “has signaled that he is likely to reject the absurdly reckless Keystone.”

According to Bloomberg, though, a U.S. Senate committee approved legislation June 18 that would bypass Obama and permit Keystone. Still, even if the Senate votes on the bill, Bloomberg says Obama could veto it and create a scenario in which a veto override is necessary.

About the Author:

Kevin Yanik was a senior editor at LP Gas Magazine.

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