Joe Oliver's Keystone XL push in Washington plagued by "brazen" false claims

Photo of Joe Oliver in Washington

Natural Resources Minister Joe Oliver has travelled to Washington in support of Keystone XL six times. His eagerness to support bitumen export pipelines at the expense of meaningful upgrading and refinery jobs in Canada has him resorting to desperate and false arguments.

During his most recent trip on Nov. 6, Oliver’s message was: "The approval of Keystone XL would enhance energy security, create thousands of jobs and support the environment. Approval would displace oil from Venezuela which has repeatedly threatened to cut off its supply to the United States and has the same or higher emissions as the oil sands, with less stringent regulations."

The U.S. imports about 8 million barrels of oil a day. Keystone XL would be a 700,000-barrel a day pipeline carrying diluted bitumen from Hardisty, Alberta. It hardly makes any difference to U.S. energy security—once the diluent needed to enable bitumen to flow down a pipeline is netted off, Keystone XL represents barely six percent of US imports.

The same amount of oil upgraded to synthetic crude in Alberta and shipped to eastern Canada would guarantee energy security for our country. It's regrettable Mr. Oliver is more concerned about energy security in the U.S. than in Canada.  He’s spending taxpayer money to promote U.S. policy while eastern Canadian refineries import higher priced Brent oil and consumers keep paying at the pump.

Now let’s move onto his claim that Keystone XL will create thousands of jobs in the U.S.

Diluted bitumen shipped to the Gulf Coast means upgrading and refining oil sands crude does not take place in Alberta—it takes place in the U.S.  So we can be assured Keystone XL actually represents thousands of jobs lost to Canada. It would be nice if Mr. Oliver cared as much about lost opportunity to create meaningful jobs from value-added in Canada as he is about promoting job creation for U.S. citizens.

Finally, Mr. Oliver states Keystone XL will support the environment. For this to be even remotely possible, three things would have to occur: oil sands bitumen would have to have lower emissions than Venezuelan heavy oil, would need to displace imported Venezuelan crude and, Venezuela would need to keep its displaced oil in the ground.

Emissions comparisons are a tricky business. I contacted Mr. Oliver’s office last week to determine how he concluded Venezuela’s heavy crude has the same or higher emissions as Alberta’s but have not yet been provided a response. So for purposes of discussion, let’s say Venezuelan oil does have higher emissions than oil sands bitumen. Would our crude displace Venezuela’s? 

Venezuelan oil is produced through the country’s national oil company Petróleos de Venezuela South America (PDVSA).  PDVSA also wholly owns a US firm called CITGO. It turns out CITGO has three large refineries in the U.S.—Corpus Christi, St. Charles (the fifth largest U.S. refinery) and Lemont—as well as a network of over 6,000 retail gasoline stations.

The combined heavy crude oil demand from these three refineries is 757,000 barrels a day—pretty close to the daily volume Venezuela delivers to the U.S. market.  CITGO’s marketing materials explain the important relationship between it and PDVSA. The national oil company of Venezuela provides an “assured supply of primary raw material.”

These refineries are known as "captives"—just like Saudi Arabia’s Motiva joint venture with Shell in Texas—they essentially have right of first refusal on their own oil and contracts to back it up. So if Canadian crude displaces Venezuelan crude, Canadian producers would need to sell into the Venezuelan government’s PDVSA-owned refineries in the U.S. 

One would think if Mr. Oliver believed Canadian crude would displace Venezuelan, he would be eager to secure a healthier business relationship with Venezuela’s state owned oil company—not alienate it.

So it's unlikely Alberta’s bitumen will displace Venezuelan crude, but if it did, any “support of the environment” would mean Venezuela would have to stop producing the displaced oil and leave it in the ground. If Venezuela did this, it would mean shutting down almost 40 percent of its resource sector. Come on.

Mr. Oliver’s claim that Keystone XL would enhance energy security, create thousands of jobs and support the environment is wrong. For many of us concerned about adding value to our non-renewable resources, meaningful and long term jobs for Canadians, global warming and climate change, his brazen misrepresentations are insulting.

Read More:

More in Opinion

Rob Fleming

Government cabinet picks bode well for public education and Vancouver schools

Rob Fleming, BC's new minister of education, is the former opposition critic. He knows the file well and can get to work quickly.
John Horgan

A “to-do” list for BC's new education minister

Patti Bacchus has some advice for whomever gets the job.
CBIS teachers

Teachers say new NDP government needs to clean up BC's offshore school program — here’s how

About 100 B.C. -certified teachers face expulsion from South Korea for allegedly having the wrong visas to work at B.C.-certified offshore schools.
Speak up about this article on Facebook or Twitter. Do this by liking Vancouver Observer on Facebook or following us @Vanobserver on Twitter. We'd love to hear from you.
//-->