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Canada PM touts Keystone pipeline in U.S., says must be approved

By David Sheppard

NEW YORK (Reuters) - Canadian Prime Minister Stephen Harper turned into a pitch man for TransCanada Corp's Keystone XL oil pipeline on Thursday, telling a New York audience the project is so important that Washington has to approve it.

President Barack Obama is under pressure from environmental groups to veto the northern section of the proposed $5.3 billion pipeline, which would take crude from the Alberta tar sands in Western Canada to refineries in Texas.

Harper's trip was the latest in a series of visits to the United States by senior Canadian politicians to sell the merits of Keystone. Obama is expected to make a decision on the pipeline late this year.

"I think this absolutely needs to go ahead," Harper said during an hour-long question-and-answer session at the Council on Foreign Relations in New York.

Ottawa says Keystone XL would help overcome capacity restrictions facing Canadian pipelines and ease a supply glut, both of which have cut the price for oil sands crude.

Harper said the pipeline would create 40,000 U.S. jobs during its lifetime and reduce U.S. dependence on suppliers such as Venezuela.

"I think all the facts are overwhelmingly on the side of approval of this, but there is a process in the United States," he said. "The process is subject to - as is everything in this country - to massive potential litigation on either side, so I know the administration will do a thorough analysis before arriving at the right decision."

The southern half of the pipeline, from Texas to Oklahoma, is more than halfway built. The northern section needs State Department approval because it crosses an international border.

Environmentalists say the pipeline will speed up development of the oil sands, where extracting crude from the oil-rich bitumen uses much more energy than does regular oil production.

As Harper arrived about 100 protesters stood across from the building on a tree-lined side street on Manhattan's well-heeled Upper East Side, waving placards with slogans such as "Stop Keystone" and chanting "TransCanada will not pass".

U.S. campaigners, who note Obama spoke about the dangers of climate change in his inauguration speech in February, say the President must veto Keystone.

"If the pipeline goes through it shows that Obama went against his word... It would be the triumph of corporations over what people want," said 17-year-old high school senior Kathryn Husiak.

Harper said the oil sands account for less than one tenth of one percent of global greenhouse emissions and noted Canada has agreed the same climate change targets as the United States.

"You can rest assured that making our emissions targets, including in the oil sands sector, is an important objective of the government of Canada," he said.

Harper noted that a preliminary State Department assessment of the project in March concluded building Keystone would not change the rate at which the Alberta oil sands are developed.

"The only real immediate environmental issue here is do we want to increase the flow of oil from Canada via pipeline or via rail," he said. "If you don't do the pipeline more, more is going to be coming in via rail, which is far more environmentally challenging in terms of emissions and risks."

(Reporting by David Sheppard; Writing by David Ljunggren and Louise Egan; Editing by Doina Chiacu and Peter Galloway)

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