Hillary Clinton: Keystone Is Not a Proxy for U.S.-Canada Relations

By Dow Jones Business News, 
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TORONTO--Former U.S. Secretary of State Hillary Rodham Clinton said on Monday that the proposed Keystone XL pipeline shouldn't be seen as a proxy for the relationship between Canada and the U.S.

Mrs. Clinton gave a speech in Toronto to promote her new book before taking questions from Frank McKenna, Canada's former ambassador to the U.S. Mr. McKenna said the Obama administration's delayed decision on whether to approve the pipeline is source of tension and is increasingly viewed as a proxy for the relationship.

The pipeline is critical to Canada, which needs infrastructure in place to export its growing oil sands production. Alberta has the world's third-largest oil reserves, with 170 billion barrels of proven reserves.

"I did not see it nor should it be a proxy for the relationship. It is, after all, one pipeline. We already have a lot of pipelines that cross our border," Mrs. Clinton said.

The potential 2016 Democratic presidential candidate, who served as President Barack Obama's top diplomat, avoided directly commenting on the merits of the pipeline.

TransCanada's Keystone XL pipeline would carry more than 800,000 barrels of oil a day from Alberta and the U.S. Bakken oil field across six U.S. states to refineries in the Texas Gulf Coast. Republicans, the Canadian government and business and labor groups have long urged the Obama administration to approve the pipeline as a source of much-needed jobs and a step toward North American energy independence. Environmental groups have been pressuring Mr. Obama to reject the pipeline, saying it would carry "dirty oil" that contributes to global warming. They also worry about a possible spill.

Mrs. Clinton said the pipeline has become a "proxy for everything" including climate change.

"However this Keystone decision is finally made, some people are going to be very happy, relieved and think it was the right decision and some people are going to be distraught and even angry and upset, thinking it was a terrible decision so I don't think we should put our relationship on the backs of this decision," she said.

Canadian Prime Minister Stephen Harper was "profoundly disappointed" that Mr. Obama delayed a decision on the pipeline, and has spoken of the need to diversify Canada's oil exports. Ninety-seven percent of Canadian oil exports now go to the U.S.

Mr. Harper is expected to soon announce approval of a proposed pipeline to the Pacific Coast that would allow Canada's oil to be shipped to Asia. Mr. Harper has staunchly expressed support for Enbridge's proposed Northern Gateway pipeline to the British Columbia after the U.S. delayed the Keystone decision.

Mr. McKenna also told Mrs. Clinton that Canada is tripling the amount of oil that is transported by rail because of a lack of pipelines. Mrs. Clinton said she believes the State Department is considering this and noted the danger of it. Oil companies have increasingly turned to rail to transport oil but there are safety concerns. A runaway oil train exploded in Lac Megantic, Quebec, last July, killing 47 people.

Copyright 2014 Associated Press

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