Canada is disappointed that the United States will delay a decision on whether to approve the Keystone XL pipeline, a controversial project to transfer crude oil from oil sands in Canada to the U.S. southern coast.
Prime Minister Stephen Harper's office issued a statement late Thursday shortly after U.S. President Barack Obama approved a State Department decision that said that due to "national concern... the department has determined it is necessary to examine in-depth alternative routes."
The review could be completed "as early as the first quarter of 2013," the State Department said, which would be months after the next presidential election.
"We are disappointed with today's decision to delay a decision on the Keystone XL pipeline," the statement said.
"As we have consistently said, the pipeline will create thousands of jobs and billions in economic growth on both sides of the border. While disappointed with the delay, we remain hopeful the project will be decided on its merits and eventually approved."
Joe Oliver, Canada's Minister of Natural Resources, said in a statement that Canada remained hopeful the project would be decided on its merits and eventually approved.
"In the meantime, our government will continue to promote Canada, and the oil sands, as a stable, secure and ethical source of energy for the world," Oliver said.
For months, U.S. protesters ranging from environmentalists to farmers have been lining up against the proposed pipeline. A crowd of thousands on Sunday gathered near the White House in the hopes of pressuring Obama to scrap the project.
TransCanada, the sole owner of the Keystone Pipeline System, said that a delay would cost the company millions of dollars and keep thousands of workers from taking jobs building the pipeline.
TransCanada CEO Russ Girling said in a statement that he was confident that the contentious pipeline will eventually be built.
"This project is too important to the U.S. economy, the Canadian economy and the national interest of the United States for it not to proceed," he said.
A spokeswoman for Harper said that if Keystone were to be delayed or lost, the government would continue to focus on exporting crude to Asian markets.
"Canada will be looking for a buyer," spokeswoman Sara McIntyre said. "We are a resource-based, energy-based country and we will be looking at all opportunities."
The move by the Obama administration will likely cast a chill over the U.S. relations with the Harper government.
Harper has been a strong advocate for the Keystone XL pipeline and has publicly argued in favor of it.
The Keystone Pipeline System is a 3,456 km long pipeline system (the U.S. section is 2,219 km long) to transport synthetic crude oil and diluted bitumen from the Athabasca Oil Sands in northeastern Alberta, Canada to refineries in the U.S. states of Illinois and Oklahoma, and further to the U.S. Gulf Coast.
It consists of the operational "Keystone Pipeline" and proposed Keystone XL (Keystone Expansion) pipeline, which is expected to be completed by 2012-2013.
Keystone XL pipeline has faced lawsuits from oil refineries, criticism from environmentalists and some members of the United States Congress on charges of the additional greenhouse gas emissions and the probability of oil spills in sensitive areas, among others.
The initial capacity of Keystone Pipeline is 435,000 barrels per day and will be increased up to 590,000 barrels per day. The Keystone XL pipeline will add 510,000 barrels per day, increasing the total capacity up to 1.1 million barrels per day.
Upon completion, the Keystone Pipeline System will meet 5 percent of the current U.S. petroleum consumption demand and represent 9 percent of U.S. petroleum imports.