Engineering News

EDITORIAL: Tale Of Two Pipelines
February 13, 2012

Energy: While our president sleeps on the Keystone XL pipeline, Canada's prime minister is in Beijing signing a series of trade deals to ship additional petroleum to China. Halftime in America? We need a new quarterback.

While Clint Eastwood, in that thinly disguised infomercial for President Obama's re-election campaign, was promising that the world would soon hear the roar of our engines, China's economy will soon be revving up with petroleum that should and could be flowing south in a pipeline the Obama administration won't build.

Prime Minister Steven Harper is making good on his warning that Canada would seek other customers for the vast oil riches locked in the oil sands of Alberta. He is leading a five-day delegation to an energy-hungry China eager to be Canada's best customer. He will not wait for an American administration fixated on windmills and Solyndras and automakers that produce overpriced electric cars prone to battery fires.

"I am very serious about selling our oil off this continent, selling our energy products off to Asia. I think we have to do that," Harper said in an interview with Canada's CTV National News in the wake of President Obama's decision to kick the Keystone oil can down the road past the November election.

On the trip Harper announced a series of multibillion-dollar trade and business agreements to ship additional Canadian petroleum, uranium and other products to China. More than 20 commercial agreements involving more than 50 Chinese and Canadian companies were announced. In addition, a joint economic study to be completed by May could form the basis for a free trade agreement.

The elephant in the room, of course, was Canadian oil. State-owned Chinese oil and gas firms have invested more than $10 billion in Alberta's oil sands and British Columbia shale gas just in the past couple of years. They are hoping for a big return on their investment.

"Canada has the resources, technological sophistication and geostrategic positioning to complement China's economic growth strategy," Harper told the Chinese. "And China's growth, in turn, complements our determination to diversify our export markets. We expect to see similar success stories in Canadian energy exports to China, once infrastructure is in place."

That infrastructure would be the Northern Gateway oil sands pipeline and a separate one for natural gas that would run westward to Vancouver for export to China. Harper has stated that it is a national priority and Sinopec, a Chinese state-controlled oil company, has a stake in the $5.5 billion plan to build the Northern Gateway Pipeline from Alberta to the Pacific Coast province of British Columbia.

There is still hope that bipartisan legislation has been introduced that approves the Keystone XL pipeline through Congress under Article 1, Section 8 of the Constitution, commonly known as the Commerce Clause, instead of through executive approval. The bill is sponsored by Sens. John Hoeven, R-N.D., Richard Lugar, R-Ind., and David Vitter, R-La. James Inhofe, R-Okla., is also one of the 44 co-sponsors.

As Sen. Hoeven, whose home state is booming thanks to the oil in the Bakken shale formation, states: "This legislation would approve Keystone XL under Article 1, Section 8 of the Constitution. That provision -- the Commerce Clause -- gives Congress the authority to regulate commerce with foreign countries, and that is the authority Congress needs to use, just as Congress used that authority in 1973 to approve the Alaskan Pipeline."

Thankfully that bill passed, the Trans-Alaska Pipeline was built and the oil riches of Prudhoe Bay have fueled much of the American economy for almost four decades. Keystone XL would run through North Dakota, and plans exist to link the Bakken oil fields to it.

This is one instance where we should learn from history and repeat it.

Source: Investor's Business Daily

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