Canada to monitor tar sands, eyes key U.S. pipeline

OTTAWA (Reuters) - Canada will boost monitoring of pollution from its oil-rich tar sands and hopes this will speed up Washington's approval of a proposed $7 billion pipeline to transport heavy Canadian crude to the U.S. Gulf Coast, Environment Minister Peter Kent said on Thursday.

Environmentalists have long campaigned against developing the tar sands of northern Alberta -- the world's third largest oil reserve -- on the grounds that development produces unacceptable amounts of greenhouse gases and other toxins.

Kent unveiled a plan to start monitoring air and water quality in northern Alberta as well as the effects of the oil sands on biodiversity. The program, to be funded by the energy industry, will initially cost around C$50 million ($53 million) a year and should start soon, he said.

"It will provide the facts and the science to defend the product, which some abroad are threatening to boycott. There is already a great deal of disinformation and misinformation," Kent told a news conference.

Output from the tar sands is set to double to 3 million barrels per day by 2020.

Opposition in the United States is mounting to TransCanada Corp's planned Keystone XL pipeline, which would carry 700,000 barrels of tar sands crude per day from Alberta to the U.S. Gulf Coast.

The U.S. State Department has said it expects to make a decision on whether to approve it by yearend.

Asked whether he thought the new monitoring plan might go some way to speeding up the U.S. approval process, Kent replied: "Yes. The short answer is yes."

He continued: "I think that there is a fair amount of informational catch-up to be done both in the United States and its various governmental agencies and in Europe."

Kent said he met Lisa Jackson, administrator of the U.S. Environmental Protection Agency, last month to "correct some of the misinformation that I know has passed her desk".

Critics say Canada's Conservative government -- a vocal backer of the oil sands -- is far too beholden to the energy industry. Alberta is a stronghold of Conservative support.

Ottawa says oil from the tar sands will help the United States cut supplies from less democratic nations.

Kent called the tar sands oil a "great resource", adding that the point of the monitoring plan was "not to prosecute the industry. It's to identify problems and to fix them."

He said Ottawa would work with the government of Alberta, which says it is serious about monitoring the operations of the industry that is its biggest revenue generator.

Alberta has formed its own panel to study the issue over water pollution after a study showed that despite contentions from the industry and government, tar sands operations were sending contaminants into the northern Alberta watershed.

($1=$0.95 Canadian)

(With additional reporting by Jeffrey Jones in Calgary; editing by Peter Galloway)