Following Rejection of Pipeline, Canada Pledges to Sell Oil to Asia

(Newsroom America) -- Canada says it will sell crude to Asian customers, particularly China, after the Obama administration on Thursday rejected a permit filed by TransCanada Corp. to build its Keystone XL oil pipeline project.

In a telephone call to President Obama, Canadian Prime Minister Stephen Harper said "Canada will continue to work to diversify its energy exports," according to documents provided by Harper's office.

And Canadian Natural Resource Minister Joe Oliver said relying less on the U.S. would help strengthen the country’s “financial security.”

The "decision by the Obama administration underlines the importance of diversifying and expanding our markets, including the growing Asian market," Oliver told reporters Thursday.

At present, 99 percent of Canadian oil exports go to the U.S., a number that Harper said he wants to reduce to make his country a "superpower" in global energy markets, Bloomberg News reported.

Outside of the Organization of Petroleum Exporting Countries, most of which are located in the volatile Middle East, Canada has 90 percent of the world's remaining proven reserves.

According to the Canadian Association of Petroleum Producers, most of the country's crude comes from oil sands in the landlocked province of Alberta. The Keystone XL pipeline would have transported hundreds of thousands of barrels of crude per day some 1,700 miles from Alberta to U.S. refineries in Texas.

The State Department cited environmental concerns as the reason for rejecting the permit. Environmentalists had pushed the Obama administration to reject the permit because they said the pipeline would pass through an ecologically sensitive region of Nebraska.

In a statement, Harper "expressed his profound disappointment with the news." Obama told the Canadian PM the project was meritorious and that the company was free to re-apply.

This month Canada began hearings on moving crude from Alberta to the country's Pacific coast off British Columbia, where it could then be shipped to Asian markets.

The administration's rejection came before a Feb. 21 deadline imposed by Congress, following Obama's announcement in November he was postponing a final decision on the pipeline until after the November elections.

"I’m disappointed that Republicans in Congress forced this decision, but it does not change my administration’s commitment to American-made energy,” Obama said today in a statement. “We will continue to look for new ways to partner with the oil and gas industry to increase our energy security."

Republicans harshly criticized the decision.

"President Obama is about to destroy tens of thousands of American jobs and sell American energy security to the Chinese," Brendan Buck, a spokesman for House Speaker John Boehner of Ohio, said. "The president won’t stand up to his political base even to create American jobs. This is not the end of this fight.

Texas governor and former GOP presidential contender Rick Perry added, "The president's focused more on the next election than on the next generation."

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