This article is the second of my series on oil. Read the first part here.
America is having problems dealing with both their economy and their unquenchable thirst for oil, but what is Canada doing to use our natural resources and improve our economy? Canada has recently seen numerous waves of investment from many oil hungry countries, looking for ways to get as much oil as possible as soon as possible. One of the plans which has received the most attention is the Keystone XL pipeline.
Before the reasons for why these pipelines made the headlines are examined, what are these pipelines, and why are they good for Canada? The Keystone XL pipeline is a pipeline that transports oil from Alberta, Oklahoma, and Montana to refineries in Illinois and Texas, allowing for oil to be sent to the United States. This pipeline is being proposed by Canadian-owned company, which also wishes to construct it.
The Keystone XL pipeline is the older of the two plans, and is not offering the creation of a new pipeline, but the expansion of the current Keystone system, with the expansion coming under a lot more fire due to the desired path of the pipeline. This plan has many benefits, including the fact that when this pipeline is created, a significantly higher amount of oil will be transported to the United States, allowing for an increased amount of exports for the Canadian government every year. Also, because this pipeline goes straight to the source, oil will be able to continue to flow and flow quicker, as it will have a minimal amount of disruptions, especially when compared to the other proposed pipelines. The current issue with this expansion, and the reason why it hasn’t been completed, is that many action groups are against the usage of oil from the tar sands.
Though this shouldn’t have a direct effect on the construction, the pipeline needs Obama’s approval, something which has been hard to get as an election season nears. Obama has delayed the decision to accept or reject the pipeline until 2013, after the next election. Many people on both sides of this debate have questioned the decision, but most commentators agree that the reasoning behind this is so that Obama can cater to a larger amount of voters compared to if he had gone one way or another. As a result of this decision, or lack of decision, the Canadian economy’s recovery and growth has been damaged. With the approval of this pipeline, Canada’s economy would receive a significant boost, as this would allow for more efficient exports to the United States. As with any plan, of course, there are drawbacks. The proposed plan would do nothing in terms of making Canada less dependent on the United States, actually increasing the amount of goods exported to the United States each year. As other countries gain the economic clout that the United States has right now, we must begin to sell to them as well, ensuring that we can receive the most profit from our resources and offer them to the highest amount of people possible.
As we wait for news of the future of the pipeline, many Canadian companies have been growing restless, looking for new markets which are more receptive to purchasing our resources. Taking this path may hurt Canada’s recovery, but in the long term be something which we can help us grow even more, and have many more markets in which to sell our resources.
