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Trump(eting) merits of XL US president ends nine years of stalling and clears way for Keystone project GARY PARK For Petroleum News
After nine years of being put through the United States regulatory, legislative and legal grinder, TransCanada has secured a Presidential Permit for its Keystone XL pipeline.
But the road ahead is far from certain for the US$8 billion project.
Standing behind President Donald Trump in the White House, TransCanada Chief Executive Officer Russ Girling was invited to follow the president’s own glowing assessment that after “waiting for a long, long time (this is) a great day for American jobs and a historic moment for North America and energy independence.”
Trump declared XL will be an “incredible pipeline, the greatest technology known to man, or woman.”
“This announcement is part of a new era for American energy policy that will lower costs for American families ... reduce our dependence on foreign oil (apparently rolling Canadian heavy crude into his evaluation of what constitutes U.S. oil) and create thousands of jobs,” he said.
Girling: Challenges ahead Girling was a trifle less hyperbolic beyond agreeing that “thousands of people are ready and itching to get to work.”
He noted that some tough battles loom before the Nebraska Public Service Commission where landowners are waging a battle to protect their properties, but made no mention of threats by Indian tribes to mount a repeat of the Dakota Access Pipeline protests.
While Trump said he would “call Nebraska” a Washington, D.C.-based regulatory law expert, Fred Jauss, said state and local regulatory processes could be long, noting that the “state permitting agencies are all independent of the federal government.”
Environmental activists are also gearing up for a fight, with Bold Nebraska, 305.org, the Sierra Club and the National Resources Defense Council declaring they will file legal challenges.
“The fight will be very real and very intense,” said Bill McKibben of 305.org.
TransCanada said only that construction of the 900-mile length in the United States will start once outstanding permits are issued, allowing Keystone XL to start its shipments of 830,000 barrels per day (about 100,000 bpd from the North Dakota Bakken shale, and the rest from Alberta’s oil sands) to the Gulf Coast refining hub within another two or three years.
Refiners in the U.S. Gulf Coast and Midwest have spent billions of dollars reconfiguring their operations to handle diluted bitumen from the oil sands and despite the shale-oil boom they will remain prime markets for Canadian heavy crude because of declines in Mexican and Venezuelan heavy-oil production.
Canada’s Natural Resources Minister Jim Carr said Trump’s approval of XL “is a very good example of how the integration of the energy economy in Canada and the United States is in the interests of both countries, so this is a good day.”
Alberta shippers welcomed the announcement from the White House, with Suncor Energy saying XL will “present a more efficient way to deliver Canadian oil to U.S. markets.”
Alberta Premier Rachel Notley said that if the pipeline does go ahead, the project will create about 5,000 “immediate term” jobs and generate more than C$1 billion in direct investment, while XL will help diversify Alberta’s crude markets.
“This is all going to make oil and gas development in Alberta more compelling to investors,” she said.
One of a trio of lines XL becomes part of a trio of pipelines that could offer about 1.5 million bpd of incremental shipping capacity to the U.S. and Asia, adding to the approvals late last year of Kinder Morgan’s Trans Mountain expansion to 890,000 bpd by 2020 and the possibility of increasing Enbridge’s Line 3 to Wisconsin to 920,000 bpd in 2019.
Carr estimated that the three projects would create 32,000 jobs in Alberta lone.
While Enbridge’s 520,000 bpd Northern Gateway, opening a route to Asia, has been shelved, TransCanada’s 1.1 million bpd Energy East remains in play, but faces a tough fight to cross Quebec on its way to the Irving Oil refinery in New Brunswick and possibly a nearby export terminal.
On the upside for the industry and resource-dependent provinces is what some observers believe has been an irreversible setback for environmental and aboriginal activists, who have failed to sway political leaders in the United States and Canada and are no longer able to engage in endless and costly legal challenges.
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