Kerry unlikely to block Keystone XL, experts say

Now that the Nebraska Gov. Dave Heineman has approved an alternate route through his state, the controversial Keystone XL pipeline may have another hurdle to deal with in the form of climate hawk John Kerry who has been nominated to be next U.S. Secretary of State.

Critics of the pipeline, a massive $7 billion plan pitched by Calgary-based TransCanada Corp. to ship oilsands bitumen from Alberta to refineries on the U.S. Gulf coast, are concerned about the project's environmental footprint.

Kerry has been a staunch advocate in the fight against climate change throughout his political career, and environmentalists are emboldened because he's now in a position to put a halt to the project.

'Americans strongly prefer Canadian oil' CAPP spokesman Travis Davies

Butproponents of the project say they remain confident that Keystone XL will be approved.

"As head of the State Department hes still charged with taking input from his department and arriving at a decision in the best interest of the nation," Canadian Association of Petroleum Producers spokesman Travis Davies said.

Davies said the pipelines infrastructure is not the issue, but rather who the preferred supplier is.

"Americans strongly prefer Canadian oil to oil supplied by other countries," said Davies.

"On its meritssecure, reliable supply, creating jobs and economic benefits in both countries, with environmentally responsible policy and performance in place Canadian oil is the right oil for the United States, at the right time and from the right country," he said.

Unlikely obstacle

Renan Levine agrees.

He's aprofessor of American politics from the University of Toronto,and saysit's unlikely that Kerry will stand in the way of the project.

"His non-committal answers at his confirmation hearing signal to me that while he may oppose the pipeline, either he wants to study the latest path or the decision about the pipeline will not be his to make," Levine said.

Levine said Obama has been a supporter of the pipeline and would not have chosen Kerry if there were concerns about the project.

"If Kerry felt strongly about opposing the pipeline, that would have already factored into his discussion with the president over his appointment," Levine said.

Key issue

Spencer Knipping, an oil adviser with the Ontario ministry of energy, said a rejection of Keystone could have a major impact on the oilsands industry.

"A rejection of Keystone would erode, to some extent, Canadian oilsands producers confidence in America as a reliable market for their oil," Knipping said.

"The uncertainty created by this would either spur greater effort on the part of producers and governments in Canada, especially Albertas, to find alternative markets for Canadian oilsands [such asAsia or Eastern Canada] or cause producers to slow down their investment in the oilsands, or some combination of the two," he said.