Has Obama sent Canada's oil to China?

The fallout continues from Barack Obama’s decision to bail out on approval of the Keystone XL pipeline until the election is safely behind him. Up in Canada – home of the company attempting to complete this continent spanning feat – the Globe and Mail notes the derision being rained on the administration by our former Ambassador to the Great White North.

“It’s blatant politics,” said David Wilkins, former U.S. ambassador to Canada, in an interview Friday. Mr. Wilkins lobbied for Keystone on behalf of the Canadian Association of Petroleum Producers. “It’s politics at its worst. It was a move by the president to placate a certain wing of his party and I think it was a real travesty.”

Mr. Wilkins pointed out that Mr. Obama had passed up 20,000 Keystone jobs to “protect one job, his own.”

Canadian industry officials were confident Keystone XL would win approval, even amid unusual signals. In October, a request had come down from Ms. Clinton herself asking that no Canadians be present at a Washington hearing into the pipeline. Canadian officials saw the request as a suggestion that Ms. Clinton supported the project, and didn’t want a Canadian presence to further disturb the peace.

Canada seems very interested in matching up their extensive supplies of oil sands energy with America’s large scale refinement capabilities around the gulf coast. But it’s not their only option. As we’ve reported before, a much shorter pipeline could be built heading west to their Pacific coast where another eager customer awaits.

Delays in building the $7-billion Keystone XL pipeline project will force Canada to sell its huge oil reserves to China instead of the United States, Prime Minister Stephen Harper has bluntly warned President Barack Obama.

The White House has put off a decision on the 1,700-mile pipeline from Alberta to Texas until after the 2012 election so a study can be carried out into its impact on an environmentally sensitive area in Nebraska.

It isn’t a done deal yet. The same report goes on to say that TransCanada may still hold off on their decision while a revised route – possibly not passing through Nebraska – is considered. But that’s going to add on significant delay and drive up the cost of the project by nearly $2B on top of current projections.

It’s nice of them to offer us the benefit of the doubt yet again, but Canada’s patience will not be infinite, nor should it be. If we hold this up for too long, or make demands which drive the price tag up to the point where it’s no longer profitable to build, the Canadians may just take their ball and go play elsewhere. Then we won’t just lose out on tens of thousands of jobs and the security benefits of reducing our dependence on overseas sources. We’ll also get to experience the shock and surprise registered by environmentalists as they come to understand that all of that oil is still going to be produced. And it’s still going to be burned. The chief difference will be that it will wind up being consumed in a country with far fewer environmental regulations regarding emissions and health and safety regulations for the people using it.

Oh… and they’ll get all the jobs and the money too. But why should we worry about a little thing like that?