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US Chamber to campaign, litigate for Canadian oil

29 Jul 2011 18:25 (+01:00 GMT)

Washington, 29 July (Argus) — The largest business association in the US is developing a campaign to promote imports of Canadian crude, as federal officials consider whether to allow the construction of the proposed 500,000 b/d cross-border Keystone XL oil pipeline.

The Chamber's new Partnership to Fuel America campaign seeks to influence federal and state regulation as well as court decisions that could impact Canadian energy supplies flowing to the US. The group will work in Washington and several US midcontinent states.

“We will fight at the national level and the state level against regulation that will discriminate against the usage and importation of Canadian oil sands,” US Chamber Institute for 21st Century Energy chief executive Karen Harbert said. “We will be involved in any litigation that is worthy of our engagement that threatens the ability of our government and our citizens from using product from the oil sands.”

The Chamber backed a US House of Representatives vote this week to set a deadline for the State Department to accept or reject TransCanada's Keystone XL pipeline project. The pipeline requires US approval because it crosses the international border. Canada has already cleared the $7bn project. The Keystone XL system would link Canada's oil sands and the Bakken formation to the oil storage hub at Cushing, Oklahoma, and the US Gulf coast refining complex.

Environmentalists oppose the project and energy industry supporters want a faster decision-making process. Operator TransCanada filed its application for the pipeline in 2008.

Moving the deadline bill from the Republican-controlled House to the Democratic-led Senate faces hurdles. The White House and the State Department have already pledged to make a decision by the end of the year, and they say the bill is unnecessary.

A number of Senators have been talking with the House bill's lead sponsors, who have yet to identify a senator willing to take up the legislation and sponsor it, according to Matthew Koch, vice-president of Institute for 21st Century Energy. “There has been some growing interest,” he said.

In addition, the group is looking at ways to repeal an Energy Independence and Security Act of 2007 provision that prohibits the US Defense Department and other federal agencies from purchasing alternative or synthetic fuels for transportation if greenhouse gas emissions are above “conventional fuel produced from conventional petroleum sources.” The Chamber is intervening in a case brought by the Sierra Club, which is suing the Defense Department for allegedly violating the so-called Section 526 provision when buying fuel made from Canadian oil.

“We are actively looking at different ways we could get that provision repealed or at the least clarify so that oil sands were not discriminated against so the Department of Defense was able to actually procure the fuel it needs for its purposes,” Harbert said.

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