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Keystone failure would send Canadian oil to Asia

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(Globalpost/GlobalPost)

A rejection by the US of the Keystone pipeline would accelerate Canadian efforts to diversify its customer base for energy exports beyond the US, a top Canadian official said Monday.

"What we will do is intensify our focus on diversifying our markets to the rapidly-growing Asian Pacific area and elsewhere," Canada's Minister of Natural Resources Joe Oliver told reporters on the sidelines of an energy conference.

Oliver offered a muscular defense of the Canadian oilsands in an address to a renewable energy conference.

Oliver told the conference the controversial Keystone pipeline would allow the US to lessen its dependence on unpredictable foreign oil suppliers. The Canadian projects are being developed "responsibly," he said.

The oil sands have been attacked by environmentalists as exceptionally carbon-intensive, resulting in a much higher level of greenhouse gases than other fuels.

But Oliver argued that they have about the same level of carbon as some California crudes.

Oliver's comments came on the heels of a public meeting last week in Grand Island, Nebraska at which proponents and foes of the Keystone line laid out their arguments. The Obama administration is expected to rule on the proposal this summer.

Oliver acknowledged Canada's plans have evolved as the US' energy profile has changed.

With or without Keystone, Canada plans to bolster its crude exports other markets in the Asia Pacific area in light of recent US oil discoveries. Almost all of Canada's oil and gas exports currently go to the US.

"We have set as a strategic objective of diversifying our markets because currently we have one customer," Oliver said.

"100 percent of our gas exports and 99 percent of our oil exports go to the US and, in light of their massive discoveries of shale gas and tight oil, they're going to need Canada less and less over the years."

Besides Keystone, Canada is considering several pipeline projects to send oil sands east or west.

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http://www.globalpost.com/dispatch/news/afp/130422/keystone-failure-would-send-canadian-oil-asia