TransCanada Corp. has finally received its presidential permit to build the Keystone XL pipeline – nine years after the project was first conceived in a world of $100 (U.S.) crude prices and rising imports to the United States.
The company still has a significant hurdle to clear in Nebraska, where the state’s Public Service Commission must approve the route over the objections of landowners there.
At a meeting with TransCanada’s chief executive Russ Girling at the White House on Friday morning, President Donald Trump hailed the $8-billion pipeline project as a key piece of privately funded infrastructure that will create U.S. jobs and enhance energy security.
“It’s going to be an incredible pipeline, the greatest technology known to man, or woman,” Mr. Trump said.
“It’s a great day for American jobs and an historic moment for North American energy independence.
“This announcement is part of a new era of American energy policy that will lower costs for American families – and very significantly – reduce our dependence on foreign oil and create thousands of jobs right here in America.”
Keystone XL will deliver some 800,000 barrels per day of oil-sands crude from Alberta to Steele City, Neb., where it will connect with lines taking the oil to the massive refining hub on the U.S. Gulf Coast.
With new projects coming on stream in the oil sands in the next few years, production is expected to grow until 2020, straining the capacity of the existing pipeline network.
Governments in Ottawa and Edmonton welcomed the decision, as did oil-industry leaders However, environmentalists and Indigenous groups in Canada and the United States argue it will contribute to ongoing dependence on carbon-intensive fossil fuels, and vowed to challenge Mr. Trump’s decision in court.
“We’re very happy because it’s going to create thousands of jobs in Canada and in the United States,” Natural Resources Minister Jim Carr told reporters in Ottawa Friday. “And it’s a very good example of how the integration of the energy economy in Canada and in the United States is in the interests of both countries, so we think it’s a good day.”
He estimated that the KXL – plus two other pipeline-expansion projects approved by the Liberal government – would create 32,000 jobs in Alberta alone.
Alberta Premier Rachel Notley congratulated TransCanada for persevering to get the presidential permit. But she said it is important to complete other pipeline projects to diversify Alberta’s market beyond the United States.
“While Keystone XL progresses, we are also going to continue our work to make sure we can get Alberta’s resources to Canadian tidewater – creating jobs, helping our energy industry grow and diversifying our export markets,” she said.
But critics say construction of Keystone XL and expansion of other oil sand pipelines will foster further oil sands development and make it more difficult for Canada to meet its international commitment to reduce greenhouse-gas emissions by 30 per cent below 2005 levels by 2030.
To move forward on Keystone XL would be inconsistent and irresponsible in light of this commitment, Ian Bruce, policy director for the Vancouver-based Suzuki Foundation, said in a release.
“This is Canada’s opportunity to move from a dark future dependent on dirty fossil fuels to a bright, healthy future powered by renewables,” he said. “Our government has a chance to change the course of this unfortunate U.S. decision.”
The KXL project became a political lightning rod during the Obama era.
The failure Barack Obama to approve the project over the course of his administration created a rift in Canadian-U.S. relations as former prime minister Stephen Harper had invested considerable political capital in getting it done.
The Trump administration decision reverses the 2015 rejection of Keystone XL by Mr. Obama, who said it would contribute to rising greenhouse-gas emissions from the oil sands. Friday’s approval is part of a broader effort by Mr. Trump to roll back Obama era climate-change policies and support development in the coal, oil and natural-gas industries.
After years of company and government leaders insisting the Canadian industry needs to diversify its export markets, the TransCanada and Enbridge Inc. projects will dramatically expand capacity into the United States, where growing shale-oil production is reducing the need for imports.
Refiners in the U.S. Gulf Coast and the Midwest spent billions of dollars prior to the shale-oil boom in configuring their operations to handle the diluted bitumen that comes from the oil sands. And with declines in Mexican and Venezuelan heavy-oil production, they remain prime markets for Canadian oil-sands producers.
However, if today’s low oil prices persist, growth in oil-sands production would level out, raising questions as to how much additional pipeline capacity is actually needed. At the same time, environmentalists warn that rising production would jeopardize Canada’s commitment to cut greenhouse gas emissions.
TransCanada’s Mr. Girling – who has battled for years to win KXL approval – welcomed the news Friday.
“We greatly appreciate President Trump’s administration for reviewing and approving this important initiative and we look forward to working with them as we continue to invest in and strengthen North American’s energy infrastructure,” he said in a statement.
Anthony Swift, of the Natural Resources Defense Council, said his organization will be looking closely at the approval and considering a court challenge. Mr. Swift contended that Keystone’s environmental-impact statement, completed in January, 2014, is so out of date that it would open any decision up to legal action.Report Typo/Error