A Comparative Perspective of the Impact of Canadian and United States Oil Regulation Law Differences on Approving Use of New Petroleum-Based Energy Sources

By Mohyi, Diana | Canada-United States Law Journal, Spring 2012 | Go to article overview

A Comparative Perspective of the Impact of Canadian and United States Oil Regulation Law Differences on Approving Use of New Petroleum-Based Energy Sources


Mohyi, Diana, Canada-United States Law Journal


INTRODUCTION:

The race to find alternative energy to fuel the American economy and save it from reliance on the Middle East oil supply fails to reflect that the United States has a ready source of oil from Canada. In terms of proven petroleum reserves, Canada ranks third after Saudi Arabia and Venezuela. (1) Canada's oil reserves are eight times larger than the United States. (2) Although the United States and Canada have similar governing structures due to their shared heritage, and both countries are committed to working together, their energy policies are not completely congruent. United States energy policy overemphasizes security and environmental concerns consequently disadvantaging its economy; alternatively, Canada's economy-focused energy policy gives its economy an advantage in energy matters.

I. BACKGROUND

Security and environmental concerns are the 'rock and hard place' in the American race to find alternative energy sources. The risk to United States energy security mandates that the United States find energy sources outside of the Middle East. (3) Experts have determined that a potential terrorist attack on the Saudi Arabian oil infrastructure can be easily carried out and have devastating effects on the United States economy. (4) As the State Department sits poised to approve the Keystone XL Pipeline Project that would allow increased oil imports from Canada, those opposed have raised concerns about the negative impact on climate change and possible air, water and wildlife pollution. (5)

The oil sands of Alberta produce crude bitumen, commonly called 'dirty oil,' which TransCanada Corporation intends to import into the United States via its Keystone XL Pipeline. (6) The Keystone XL project would transport 900,000 barrels of oil a day from Alberta through the United States and on to refineries in the Gulf of Mexico. (7) The pipeline will start in Hardisty, Alberta, cross the United States border from Monchy, Saskatchewan, and cut across Montana, South Dakota and Nebraska. (8) The pipeline expansion project will also extend the pipeline from Cushing, Oklahoma, to Houston and Port Arthur, Texas. (9) American groups opposed to the pipeline worry about the potential for more oil-leak disasters. (10) Politicians in Nebraska have urged United States Secretary of State Hillary Clinton to consider alternative routes for the pipeline. (11) Meanwhile, the Canadian government has already approved the Keystone XL Pipeline Project. (12) Canada's approval includes provisions for landowner rights and environmental protection. (13)

The United States has cautiously made advancements toward full approval of the project. In January 2012, United States President Barack Obama denied TransCanada permission to build the northern part of the pipeline from Canada to Oklahoma because of the need for more time to review the environmental impact. (14) Recently, in June 2012, the Obama Administration acted on its promise to expedite the southernmost portion of the project by granting construction permits for part of the route passing through Texas. (15) Other United States government entities have followed suit. The U.S. Army Corps of Engineers in Tulsa, Oklahoma subsequently approved the segment of the Keystone XL pipeline, which will run from Cushing to Texas. (16) Keystone XL Pipeline builder TransCanada needs approval for its wetland and water-crossing plans from each U.S. Army Corps office which oversees a district included in its Keystone XL Pipeline Plan. (17) TransCanada awaits similar approval from the Corp's Fort Worth, Texas district office. (18)

II. SURVEY OF OIL REGULATION LAWS IN CANADA AND THE UNITED STATES

The United States and Canada have a shared British history, which has influenced legal development in the two countries. (19) The founders of these nations sought to ensure that their citizens had freedom and sought to build prosperous economies. (20) Founders also established federal systems of government in which the national government shares its powers with the sub-national state or provincial governments, respectively. …

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