WASHINGTON (Sputnik) — The final decision on Keystone XL pipeline construction will hardly affect Canadian tar sands oil production, unlike possible Saudi Arabia’s intention to keep oil prices low, former UN adviser David Livingston told Sputnik.
“The fate of the Canadian oil sands may not rest in the Keystone XL pipeline at all, but instead in the strategic intentions of Saudi Arabia and OPEC [Organization of the Petroleum Exporting Countries],” former adviser to the director of the Energy and Climate Change Branch of the UN Industrial Development Organization Livingston told Sputnik on Wednesday.
Why oil prices haven't juiced global growth as expected: http://t.co/u0Di2rHrcF pic.twitter.com/lzvPzUwSAp
— Ian Talley (@IanTalley) 4 февраля 2015
Livingston explained that Canada and Saudi Arabia are “quietly locked in a very competitive battle for market share in the heavy oil market,” particularly in the US Gulf Coast.
“If the Saudis truly wish to impair the long-term prospects for the oil sands, they could do so by keeping the oil price at its current level for at least two years. This would have an impact on future investment decisions arguably equal to or greater than any decision on Keystone XL,” Livingston added.
The billions invested in oil sands projects were based on a higher price for oil. Now "nobody… feels very secure" http://t.co/rwrAyJ2E9e
— NYT Business (@nytimesbusiness) 3 февраля 2015
The White House said earlier it would veto the Keystone XL pipeline bill that is largely supported by the Republican-dominated Congress. Last week, the Senate passed the bill with 62 votes in favor and 26 votes against, and the House of Representatives is scheduled to vote on the bill next week.
Oil prices have steadily declined, following a decision by the OPEC in late November to keep oil production volumes unchanged. While in summer 2014 oil cost about $110 per barrel, the price of one barrel is now only $58.
