09/13/2011 02:28 EDT | Updated 01/12/2012 02:21 EST

Oliver using California trip to stump for Keystone XL oilsands pipeline

SAN FRANCISCO - The federal natural resources minister said Tuesday he'll be stumping for the controversial Keystone XL oil pipeline during his visit to California this week.

Joe Oliver said he'll make the case that the U.S. State Department should approve the US$7-billion pipeline, which would ship oilsands crude to the Texas coast.

"This is an enormously important project for both of our countries. For the United States, of course, it addresses the issue of energy security," he told reporters on a conference call from San Francisco, where he is attending a meeting of energy and transportation ministers.

"It also results in a significant number of jobs during construction, and after, and billions of dollars of economic growth for the United States. And coming at a time of some economic challenge, these are critical factors."

TransCanada Corp.'s (TSX:TRP) Keystone XL project would expand its existing Midwest-bound pipeline to the U.S. Gulf Coast, where refineries are hungry for the type of heavy crude produced in the oilsands.

It has been a rallying point for environmental groups, who say the project will make the United States more reliant on "dirty" oilsands crude and endanger key water sources like Nebraska's Ogallala aquifer in the event of a spill.

The U.S. State Department is tasked with deciding whether Keystone XL should go ahead, since it would cross the Canada-U.S. border. In a final environmental impact assessment last month, it said the project is unlikely to cause any major environmental damage. A final decision is expected by year-end.

"We respect the U.S. political and regulatory process. But we are, of course, encouraged by the environmental impact statement of the U.S. State Department, which said that there were no significant impacts to most resources along the proposed corridor," Oliver said.

Last week nine Nobel Peace Prize winners -- including the Dalai Lama and South African clergyman Desmond Tutu -- wrote to U.S. President Barack Obama urging him to nix the project. Hollywood stars including Daryl Hannah and Margot Kidder were arrested at anti-Keystone demonstrations outside the White House.

On the conference call, Oliver said a decision on Keystone ought to be based on science, not star power.

"When a Nobel Prize winner in physics, which Secretary (of Energy) Steven Chu is, comments favourably, that's more relevant to me than what an actor might have to say about the subject."

Chu said earlier this month importing oil from Canada "is much more comforting than to have other countries supply our oil."

He told an energy program that airs on Bloomberg TV the project "is not perfect, but it's a trade-off.''