Posts under ‘Oil Sands’

• Terry Macalister
• guardian.co.uk, Thursday 2 February 2012 17.44 GMT

Shell has been accused of “moral bankruptcy” by unions after unveiling a 54% rise in full-year profits less than a month after shutting its final salary pension scheme to new employees in Britain.

The oil company reported global annual earnings of $28.6bn (£18bn) – more than £2m an hour – while paying out $10.5bn to shareholders during 2011 and promising to raise dividend levels further in the coming months.

Peter Voser, Shell’s chief executive, said “there is more [good profit] to come” as he outlined a new programme of increased global investment as well as cuts that he said would provide even better returns for investors.

“We have worked hard to generate a strong pipeline of investment opportunities for Shell … All of this is supported by efficiency gains from our continuous improvement programmes,” Voser said.

But Europe’s largest oil group was attacked for displaying “predatory capitalism” by Len McCluskey, leader of the Unite union. “Shell reminds us of the moral bankruptcy of the corporate elite. The company is needlessly closing its final salary scheme while posting colossal profits,” he said. “Rather than provide security to its future staff and still make a profit, it has chosen greed. Shell is not alone: Unilever is needlessly slashing its employees’ pension benefits when there is no financial reason for doing so.”

Shell, which has also upset staff by unveiling plans to shut its major research and development centre at Stanlow in Cheshire after disposing of its refinery there, said it was surprised by the attack.

A spokesman pointed out that most government and private pension schemes paid in Britain were supported by Shell, which provides 12% of all dividends from the FTSE 100 index of leading firms.

The Anglo-Dutch group is riding high on the back of surging oil prices – which were more than $30 per barrel higher last year than in 2010 – and booming demand for gas, but says it is making most of its money outside Britain and makes barely 1p per litre out of petrol sales.

Voser pointed out that two thirds of the UK pump price went straight to the government as tax. He blamed near record prices for forecourt diesel on global crude market conditions and said Shell’s UK retail operations continued to come under “very heavy competitive pressures”.

Shell would continue to invest in the North Sea in oil projects such as those it has west of Shetland, but said there was a need for the right “tax structures to keep the oil and gas industry alive here”.

The company was doing “our bit for balancing the books” of the Treasury through paying a heavy tax burden, it said, while denying that its recent sale of the Stanlow refinery to an Indian group had any impact on the wider refining and distribution problems that have recently hit the south-east of England.

Shares in Shell rose 11% last year while arch-rivals such as BP saw no growth at all but on Thursday the Anglo-Dutch group’s stock market valuation fell slightly as the City was disappointed by the financial performance in the last quarter of the year.

Shell reported three-monthly earnings of $6.5bn, which was up on the same period last year but down quite heavily on the third quarter.

Total oil and gas production in the fourth quarter was lower, at 3.3m barrels of oil equivalent per day compared with 3.49m barrels a year ago. Shell said it would increase annual production to 3.7m barrels by 2014, helped by a $100bn investment plan which started in 2010.

The company said it would put much of its drilling efforts into the US and it now claims to have become the biggest driller – but not producer – in the deepwater Gulf of Mexico where BP used to reign supreme. Since the government moratorium on drilling in the Gulf, imposed following BP’s Deepwater Horizon spill, was lifted, Shell has obtained permission to drill five wells during 2012.

The company said it was treading carefully, meanwhile, in the Middle East in the wake of the Arab spring, but hopes to reveal soon how its exploration programme has been going in Saudi Arabia and when it plans to get back to similar work in Libya.

Shale hopes

Shell is hoping to turn the “shale gas revolution” sweeping north America into an export earner but also expects to see the controversial new energy source taking off in Europe once an “emotional” debate dies down.

The Anglo Dutch oil company is looking at possible plans to ship surplus quantities of the fuel, as liquefied natural gas or “gas-to-liquid” processed fuel, from the US.

Natural gas prices in north America have fallen to a 10-year low due to the discovery that gas can be extracted from shale rock using a technique known as hydraulic fracturing or “fracking”. It uses an assortment of chemicals to release gas with tiny explosions and has upset environmentalists and some politicians.

Peter Voser, chief executive of Shell, said $6bn would be spent worldwide on different kinds of shale gas operation, half of this in the US. The heavily populated nature of Europe versus the US made it more difficult to “frack” this side of the Atlantic, Voser conceded, but he said governments should “not take fast and emotional decisions” to restrict shale extraction. Shell expects Poland and even Germany to proceed with shale gas exploitation but it is also looking at operations in Ukraine and China.

SOURCE ARTICLE

John

Interesting that a Canadian company in Argentina is apparently far more responsive to local pressure than Shell in Canada, Ireland, Nigeria….

If Shell had taken a similar approach to Osisko, development of tar sands, Corrib, and shales would never have occurred. Perhaps Shell could learn something here?

(ARTICLE AND COMMENT SUPPLIED BY A REGULAR CONTRIBUTOR)

1 February 2012

Canadian mining company Osisko has suspended a gold mining project in Argentina after protests by locals.

Osisko said it would put its operation in north-western La Rioja province on hold if it did not get the backing of the local population.

Hundreds of people protested at the Canadian embassy in Buenos Aires last week, saying that the Famatina project would pollute the environment.

Osisko says it conducts environmentally responsible exploration.

Local residents, supported by environmental groups such as Greenpeace, had been holding a series of protests against the project.

Vocal opposition

On 2 January they barricaded the main road leading to the site, a blockade which still remains in place.

On Thursday, demonstrators marched on the governor’s office in La Rioja, demanding that Governor Luis Beder Herrera heed their demands to stop the project, or resign.

And on Friday, a delegation travelled to the Canadian embassy in Buenos Aires to make its opposition to the project known.

The protesters say mining of the Famatina mountain would require a million litres of water a day and the use of cyanide to extract precious metals.

Osisko said Famatina was still only an exploration project, with “no current plan, design or intent for any mining operations”.

The company said that the development of the mine was still highly hypothetical, since little was known about the amount, quality and location of its mineral resources.

In a statement published on its website, Osisko said it would prepare an information and consultation programme about the project.

It said that if “there was no social license for exploration and development around the Famatina project area, no work would be conducted”.

SOURCE ARTICLE

NEW YORK, NY–(Marketwire -01/09/12)- The oil and gas sector is set to play a big political role this election year as President Obama must decide whether or not to approve the controversial Keystone Pipeline which would send tar sands crude from Alberta to Texas. Originally, the Obama administration announced that it would delay a final decision in order to complete additional environmental studies. However Republicans in Congress are seeking to force Obama’s hand as the pipeline has become a cause for Republican presidential candidates. The Paragon Report examines the outlook for companies in the Oil and Gas sector and provides equity research on Chevron Corporation (NYSE: CVX – News) and Royal Dutch Shell PLC (NYSE: RDS-A – News) (NYSE: RDS-B – News) (LSE: RDSA.L – News) (LSE: RDSB.L – News). Access to the full company reports can be found at:

www.paragonreport.com/CVX

www.paragonreport.com/RDS

Last week at his annual “State of American Energy” speech, American Petroleum Institute head Jack Gerard proclaimed that President Obama faces “huge political consequences” if he does not approve the proposed 1,700-mile Keystone XI pipeline that would link Alberta’s oil stands to refineries on the U.S. Gulf Coast. The Obama administration must decide by February 21 to accept or deny a permit for the project.

FULL ARTICLE

By: The Canadian Press 12/5/2011 12:41 PM

A haul truck carryong a full load drives away from a mining shovel at the Shell Albian Sands oilsands mine near Fort McMurray, Alta., Wednesday, July 9, 2008. THE CANADIAN PRESS/Jeff McIntosh

EDMONTON – Newly filed documents say Shell Canada’s environmental study of its proposed oilsands expansion should be rejected because it is woefully out of date and lowballs probable industrial development by a factor of 12.

A report to the Canadian Environmental Assessment Agency by the Oilsands Environmental Coalition points out that Shell’s (NYSE:RDS) look at the cumulative effects of development in the region doesn’t include anything proposed since 2007.

Since then, says the report, there have been 11 new projects proposed within the study area and more than a billion dollars has been spent acquiring oilsands leases.

“It strains credulity that more than $1 billion in lease sales … will result in no reasonably foreseeable development of any kind,” says the document.

The report, derived from industry and government figures, also accuses Shell of ignoring the extent of forestry as well as recent forest fires that have swept through the region.

While Shell maintains that only five per cent of the area around the Jackpine expansion is likely to be affected by development, the coalition maintains the real figure will be closer to 60 per cent.

The discrepancy between overall industry plans and what individual companies list in regulatory filings threatens the ability of the public to make good decisions about the oilsands at a time when they are under increased scrutiny around the globe, Simon Dyer of the environmental think-tank Pembina Institute said Monday.

“It’s pretty black and white that this is not a credible assessment,” said Dyer, whose group is part of the coalition that wrote the report.

Shell’s manager of regulatory approvals said the company will review the coalition’s document.

“The regulatory review process for this project has taken four years and in this intervening period oilsands development has continued to grow,” Donald Crowe said in an email.

“This assessment included all planned developments as defined by Alberta Environment at the time of filing and included the effects of forest harvest and fires.”

Crowe said Alberta Environment determined the assessment to be complete in 2010.

Companies are required to look at how much development is “reasonably foreseeable” in a region where they want to work and how their proposal would add to the overall load on the environment.

That study goes to a federal-provincial review panel, which uses it to help decide if a project should go ahead. The panel for Shell’s Jackpine project is expected to announce hearing dates early in the new year.

Shell filed its cumulative environmental effects assessment for the expansion, which would produce 100,000 barrels a day, in 2007. An assessment of socio-economic effects was updated the following year but environmental impact was not.

The coalition used government documents and public announcements to pinpoint seven projects that have begun the regulatory process since 2007 and another four that have been publicly announced. As well, regulatory papers show that 3,137 exploration wells have been drilled in the region in the last four years, none of which is considered in Shell’s assessment.

Dyer said that while governments trumpet the continuing growth in oilsands production, regulators aren’t considering the cumulative impact.

“There’s a really big disconnect within governments between those departments responsible for economic development and those required for environmental protection,” he said. “It only makes sense that the economic projections should be the same as the environmental projections to make intelligent decisions.”

Richard Dixon, director of the University of Alberta’s Centre for Applied Business Research in Energy and the Environment, said French energy giant Total was caught with a similar gap during hearings for its Joslyn project. That panel required Total to file extensive additional information on cumulative impacts.

The panel at Shell’s hearing may well do something similar, he suggested.

“They’re not going to shovel that under the carpet. If Shell has missed (something) and Pembina caught it, good for Pembina.”

Dixon said credible cumulative impact studies are closely linked to oilsands environmental monitoring Alberta is developing with the federal government. Both are needed to make good decisions, he said.

“You compare (cumulative effects) with what you’ve got for good monitoring and say, ‘OK, here’s where the threshold is and here’s where this is bumping up and…now we have to rethink this.’

“And those days are coming.”

SOURCE ARTICLE

Energy companies are shifting their focus away from the Middle East and toward the West—with profound implications for the companies, global politics and consumers

DECEMBER 5, 2011

By GUY CHAZAN

Big Oil is redrawing the energy map.

For decades, its main stomping grounds were in the developing world—exotic locales like the Persian Gulf and the desert sands of North Africa, the Niger Delta and the Caspian Sea. But in recent years, that geographical focus has undergone a radical change. Western energy giants are increasingly hunting for supplies in rich, developed countries—a shift that could have profound implications for the industry, global politics and consumers.

Driving the change is the boom in unconventionals—the tough kinds of hydrocarbons like shale gas and oil sands that were once considered too difficult and expensive to extract and are now being exploited on an unprecedented scale from Australia to Canada.

The U.S. is at the forefront of the unconventionals revolution. By 2020, shale sources will make up about a third of total U.S. oil and gas production, according to PFC Energy, a Washington-based consultancy. By that time, the U.S. will be the top global oil and gas producer, surpassing Russia and Saudi Arabia, PFC predicts.

That could have far-reaching ramifications for the politics of oil, potentially shifting power away from the Organization of Petroleum Exporting Countries toward the Western hemisphere. With more crude being produced in North America, there’s less likelihood of Middle Eastern politics causing supply shocks that drive up gasoline prices. Consumers could also benefit from lower electricity prices, as power plants switch from coal to cheap and plentiful natural gas.

And the change is reshaping the oil companies themselves, as they reallocate their vast resources to new areas and new kinds of fuel. Working in the rich world—with its more predictable taxes and investor-friendly policies—removes some of the risks about the big oil companies that worry investors, making them less vulnerable to the resource nationalism of petrostates like Russia and Venezuela.

“A company like Exxon Mobil can eliminate the technological risk” of developing unconventionals, says Amy Myers Jaffe, senior energy adviser at Rice University’s Baker Institute. “But it can’t eliminate the risk of a Vladimir Putin or a Hugo Chavez.”

This new way of looking at risk is at the heart of the transformation. International oil companies traditionally face a choice: They can either invest in oil that is easy to produce but located in politically volatile countries. Or they can seek opportunities in stable countries where the oil is hard to extract, requiring complex and expensive production techniques.

Now, in a sense, the choice has been made for them. Big onshore fields in the world’s most prolific hydrocarbon provinces are increasingly the preserve of national oil companies, state-owned behemoths like Saudi Aramco and Russia’s OAO Rosneft and OAO Gazprom. For foreign majors like Royal Dutch Shell PLC and BP PLC, their former heartlands in the Gulf sands are now largely off-limits.

Shut out of the Middle East, they have responded with a huge push into new areas, both geographic and technological. Over the past few decades, they have built vast plants to produce liquefied natural gas, or LNG. They have drilled for oil in ever-deeper waters, ever farther offshore. They have worked out how to squeeze oil from the tar sands of Alberta. And they have deployed technologies like hydraulic fracturing, or fracking, and horizontal drilling to produce gas from shale rock.

Wood Mackenzie, an oil consultancy in Edinburgh, says that more than half of the international oil companies’ long-term capital investments are now going into these four “resource themes”—a huge shift, considering how marginal the companies once considered them.

There are also drawbacks to the new focus on nontraditional kinds of hydrocarbons. Environmentalists strongly oppose shale-gas extraction due to fears that fracking may contaminate water supplies, the oil-sands industry because it is energy-intensive and dirty, and deep-water drilling because of the risk of oil spills like last year’s Gulf of Mexico disaster.

There are financial considerations, too. While conventional assets are relatively easy to develop and historically have offered good returns, projects in some more technically difficult sectors—like deep-water and LNG—typically take longer to bring on-stream, and are higher cost, meaning returns are lower.

But there is an upside for the majors. “The silver lining is the shape of the profile of these projects, which is different than conventional ones,” says Simon Flowers, head of corporate analysis at Wood Mackenzie. LNG ventures, for example, can deliver contract levels of gas at a steady rate over 20 years. “So the returns may be lower, but overall you have a more dependable cash-flow stream,” he says.

By pursuing these nontraditional fuels, the oil companies are committing themselves ever more deeply to the wealthy nations of the Organization for Economic Cooperation and Development. Wood Mackenzie says $1.7 trillion of future value for all the world’s oil companies—52% of the total—is in North America, Europe and Australia. The consultancy has identified a “significant westward shift” in oil-industry investment, away from traditional areas like North Africa and the Middle East “towards the Brazilian offshore, deepwater oil in the Gulf of Mexico and West Africa and unconventional oil and gas in North America.” And then there’s Australia, far out east, “which is in the early stages of a spectacular growth phase.”

Consider Shell. Seven years ago, the oil giant, synonymous with turbulent hot spots like Nigeria, decided to shift resources to more-developed nations that offered a friendly environment for investors and predictable tax regimes. Shell used to split spending on the upstream—the basic business of exploring for and producing oil and gas—roughly 50/50 between nations in the OECD and those outside of it. It’s now 70/30 in favor of the OECD, with the bulk going to Canada, Australia and the U.S.

“The risks in OECD are technical, but they’re easier to manage than political risk,” says Simon Henry, Shell’s chief financial officer. “In the OECD, you have more control of your operations.”

With the new turf comes a new focus: Shell will soon be producing more natural gas than oil. That might have scared investors a decade or two ago. But with gas demand set to grow strongly, especially in Asia, the future for gas-focused companies is looking increasingly rosy—especially after the Fukushima disaster, which prompted a rethinking of nuclear power in Japan and elsewhere.

Entrenching Its Position

Like Shell, Exxon Mobil Corp. is entrenching its position in the Americas, home to just over half its resource base. Its unconventional resources have grown by almost 90% over the past five years to 35 billion oil-equivalent barrels—partly thanks to its 2010 acquisition of XTO Energy, a big shale-gas player. Exxon’s U.S. unconventional production alone is expected to double over the next decade.

Some giants are looking further afield. Chevron Corp.’s three focus areas—the parts of the world that account for the bulk of its exploration budget—are the U.S. Gulf of Mexico, offshore West Africa and the waters off western Australia.

In particular, the company has staked out a huge position in Australian natural gas; its Gorgon LNG project in Australia is one of the world’s largest. The push is based on expectations of surging demand for the fuel in Asia, largely in China, which wants to improve air quality in its heavily polluted cities by switching from coal to gas in power generation and running more commercial vehicles and buses on natural gas.

It “wasn’t a conscious decision” to move into the OECD, says Jay Pryor, head of business development at Chevron. The company doesn’t decide what projects to pursue based on where they are in the world, but on the quality of the resource, the commercial terms and the geopolitical risk. “The best rocks with the best terms are going to get the quickest investment,” he says. Money has flowed into the U.S. and Australia because they offer the best incentives to oil companies, he says.

In recent years, Chevron has also expanded into another promising part of the OECD—Europe, which some estimates suggest has shale-gas reserves comparable to those in the U.S. Chevron has picked up millions of acres of land in Poland and Romania, where it will soon be drilling for shale gas. That’s part of a wider trend: Dozens of companies are now exporting to Europe technologies used to open up shale deposits in the U.S.

Holding Back

Not all oil companies have piled into unconventionals the way Shell and Chevron have. BP, for one, has far fewer investments in tar sands and shale gas than its peers, though it has an unrivaled position in deep-water oil. That means it has less of a presence in the OECD than Shell: Its biggest projects are in poorer countries like Angola, Azerbaijan and Russia, and in recent years it has won a string of licenses and contracts in India, Iraq, Egypt and Jordan.

Yet even BP has been bolstering its position in the OECD. It said recently it was pressing ahead with a £4.5 billion ($7 billion) investment in the North Sea’s Clair oil field, part of a five-year, £10 billion program.

Still, being in the OECD doesn’t guarantee oil companies an easy ride. Operators in the North Sea were shocked earlier this year when the U.K. government suddenly increased taxes on oil producers. In France, authorities recently banned hydraulic fracturing. And in the U.S., the drilling moratorium in the Gulf of Mexico, imposed after the Deepwater Horizon blowout, threw many of the majors’ plans into disarray.

But still, for the most part, the risks are much greater in the non-OECD. “The majors went to Venezuela and lost their property,” says Ms. Myers Jaffe of the Baker Institute. “They went to Russia and had to whisk their CEO off to a safe house. They went to the Caspian and realized they couldn’t get the oil out. I for one would much rather invest in a company that had 70% of its spending in the OECD.”

Mr. Chazan is a staff reporter in The Wall Street Journal’s London bureau. He can be reached at guy.chazan@wsj.com.

SOURCE ARTICLE

Wed Nov 30, 2011 1:43pm EST

* Community seeks C$1.5 million, citing blocked requests

* Shell says has spent more than C$200 mln

Nov 30 (Reuters) – A Canadian native group is suing Royal Dutch Shell Plc for what it said was a failure by the oil major to live up to environmental funding agreements tied to Shell’s massive northern Alberta oil sands developments.

The Athabasca Chipewyan First Nation seeks C$1.5 million ($1.47 million) from Shell for allegedly blocking requests for money to be used for sustainable development and education initiatives in the community under agreements made in 2003 and 2006.

Shell’s Athabasca Oil Sands project, Canada’s third largest tar sands mining development, is in the aboriginal group’s traditional territory. The Athabasca Chipewyan said the company is trying to change the terms of the funding, meant to ease the impact of tar sands development on the community. The charges have not been proven in court.

“We came in good faith, always willing to talk with them,” Athabasca Chipewyan Chief Allan Adam told Reuters on Wednesday. “Shell played the role of tough guy and refused to deal with us on the terms we negotiated.”

The suit comes amid growing international controversy over the impact of oil sands development on air, land, water and local communities. The Alberta oil sands deposits are the third-largest source of crude in the world, and Canada has made exports of the resource a top national priority.

The community of Fort Chipewyan, located downstream from the oil sands developments, has experienced unusual health problems, including elevated rates of rare cancers. Studies have been unable to definitively rule out a link with the oil projects and controversy remains.

Adam said the lawsuit is unrelated to the health concerns in the community of 963 people.

For its part, Shell said the dispute amounts to a fraction of the more than C$200 million the company has spent on numerous initiatives in the community over the past five years under its “good neighbor” program.

An example of a request that was denied was a bursary in which there wasn’t a student to use it and the first nation wanted cash in lieu, said John Broadhurst, Shell’s vice-president, development, heavy oil.

He said he was disappointed by the lawsuit and hoped the two sides can reach a settlement.

“It’s not that we’re not committed to doing right by the community and following through on our commitments,” Broadhurst said.

SOURCE ARTICLE

By Eduard Gismatullin – Nov 17, 2011 9:15 AM GMT

Royal Dutch Shell Plc (RDSA) and BP Plc (BP/) will benefit from a plan to reverse the direction of the Seaway pipeline in the U.S. and pump crude to the Gulf of Mexico coast, RBC Capital Markets said.

Shell and BP will each pump about 13 percent of their total oil output in North America through the pipeline, said Peter Hutton, a London-based analyst at RBC. The reversal will ease the glut of West Texas Intermediate oil at the U.S. benchmark’s delivery hub at Cushing, Oklahoma, and narrow the spread with Brent oil. That will boost adjusted earnings for Shell and BP by 3.2 percent and 3 percent respectively, Hutton said.

“Market reaction at Shell should be more positive,” Hutton wrote today in an e-mailed report. BP “used to produce a higher proportion of liquids in North America, but the greater decline in U.S. Gulf of Mexico, and the expansion by Shell of oil sands production, has closed the gap.”

Enbridge Inc. (ENB) yesterday agreed to pay $1.15 billion for ConocoPhillips (COP)’s share of a north-flowing pipeline that extends from Houston-area refineries in the Gulf of Mexico to Cushing. Together with Enterprise Products Partners LP (EPD), the line’s other owner, the companies will reverse the flow.

WTI oil’s discount to Brent narrowed to the smallest margin in eight months after the Seaway pipeline reversal plan was announced.

RBC increased its forecasts for WTI to $93.50 a barrel from $91.50 in 2011 and to $100 a barrel from $90 in 2012. It left its forecasts for Brent oil unchanged at $109.50 and $109 respectively.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

SOURCE ARTICLE

EXTRACTS FROM THE RepRisk WATER SCARCITY REPORT

RepRisk is the leading provider of dynamic business intelligence on environmental social and governance risks.

In 2010, access to clean water received recognition as a basic human right through a majority vote of the United Nations General Assembly. According to the UN, nearly 900 million people have no access to clean drinkable water, almost 1.8 billion live in areas where water is scarce, and a further 1.6 billion live in countries, which lack the infrastructure to extract water from natural sources. The World Bank calculates that by 2030, water demand will exceed supply by 40 percent, as a growing world population demands more water for agricultural, industrial and personal use.

8 November 2011

The US state department’s handing of a request to build Keystone XL, a 1,600-mile (2,700km) oil pipeline, will be reviewed for wrongdoing.

Reports have surfaced that a company involved in the environmental review had listed developer TransCanada as a “major client”.

The review decision comes a day after demonstrators protested against the pipeline plans outside the White House.

A review could potentially delay a final decision on the pipeline.

The state department is handling public consultations on the project as the pipeline would cross the US border with Canada, but the White House has made it clear that President Barack Obama will influence the final outcome.

The review request was led by Senator Bernie Sanders of Vermont and Representative Steve Cohen of Tennessee, both Democrats.

“At a time when all credible scientific evidence and opinion indicate that we are losing the battle against global warming it is imperative that we have objective environmental assessments of major carbon-dependent energy projects,” Mr Sanders said.

In an October letter, Mr Sanders and Mr Cohen specifically asked the state department’s inspector general to look at all contractual or financial ties between the consultant, Houston-based Cardno Entrix and TransCanada.

They also asked for a review of state department emails related to a TransCanada lobbyist who had worked in Secretary of State Hillary Clinton’s 2008 presidential campaign.

TransCanada, which is seeking permission to build the pipeline from Alberta to the Gulf coast in Texas, said it welcomed the review.

“We conduct ourselves with integrity and in an open and transparent manner. We are certain that the conclusion of this review will reflect that,” spokesman James Millar told the Associated Press news agency.

Pollution and political risks

Environmentalists are opposed to the Keystone XL project because of the method used for extracting petroleum from Alberta’s oil sands.

They are also concerned by the risk of pollution on the pipeline route.

The proposed pipeline would pass south from Alberta through the US states of Montana, South Dakota, Nebraska, Kansas and Oklahoma before ending up at refineries in Texas.

Correspondents say the decision to allow the project or not is fraught with political risk for Mr Obama.

If he rejects it, he could be accused of destroying jobs. But allowing it to go ahead could lose him the support of activists who helped propel him to the White House, they note.

On Sunday, protesters formed a human chain around the White House, with some carrying an inflatable replica of a pipeline on their shoulders.

“We have to leave the tar sands oil in the ground. That’s the only solution if we are going to save the planet,” protester Martin Springhetti told AP.

SOURCE ARTICLE