TRUMP APPROVES KXL, BUT BATTLES REMAIN
Opposition from activists, bid to win state, local permits the next challenges
GEOFFREY MORGAN
The fight to build the Keystone XL oil pipeline will move from Washington to Nebraska after U.S. President Donald Trump approved the controversial and long-delayed project on Friday.
Trump, flanked by TransCanada Corp. president and CEO Russ Girling in the Oval Office, issued a presidential permit for the $8-billion Keystone XL pipeline, more than eight years after the 830,000 barrels-per-day oil pipeline between Alberta and the U.S. Gulf Coast was first proposed.
“You’ve been waiting for a long, long time,” Trump said to Girling. “It’s a great day for American jobs, and a historic moment for North America, and energy independence. This announcement is part of a new era of American energy policy that will lower costs for American families, ... reduce our dependence on foreign oil and create thousands of jobs.”
TransCanada’s next step is to spend the coming months lining up state and local permits, especially in Nebraska where the project has previously faced entrenched opposition.
“Thousands of people are ready and itching to get to work,” Girling said.
Trump even offered to “call Nebraska,” where opposition to Keystone began years ago, to help speed things along.
But state and local regulatory processes could be drawn out depending on the level of opposition to the project, and Trump would be unable to force those agencies to act swiftly, experts said.
“The state permitting agencies are all independent of the federal government,” said Fred Jauss, a Washington D.C.-based regulatory law expert and partner with Dorsey and Whitney LLP.
“TransCanada obtaining the presidential permit is a big first step,” but the company still has a lot of work to do in Nebraska and other states with landholders and regulatory bodies.
Environmental activists are also gearing up for a fight, with Bold Nebraska, 350.org, the Sierra Club and the National Resources Defense Council warning that they would file legal challenges in an attempt to block the project.
“The fight will be very real and very intense,” 350.org founder Bill McKibben said during a conference call.
On the same call, Ponca Tribe of Nebraska chairman Larry Wright said he was “vehemently opposed to this pipeline” and said there would be protests and encampments against Keystone XL in the same way that activists attempted to block the Dakota Access Pipeline.
TransCanada expects construction of the project to start after the remaining permits are issued and Keystone XL would be in service two to three years later, according to spokesman Terry Cunha.
Natural Resources Minister Jim Carr called the announcement “good news” that would add hundreds of millions of dollars to Alberta’s GDP.
He added he expected the regulatory process in Nebraska to take eight months.
Shippers welcomed the news. Suncor Energy Inc. spokesperson Sneh Seetal said her company had contracts to move its oil on the Keystone XL pipeline, which “presents a more efficient way to deliver Canadian oil to U.S. markets” than rail.
The announcement comes just as pipelines are filling up again and crude-by-rail is on the rise.
“We are at capacity now and, in fact, more volumes are starting to move on rail, which isn’t the safest way to go,” said Chris Bloomer, Canadian Energy Pipelines Association president and CEO.
Even with approvals for Keystone XL, Kinder Morgan’s Trans Mountain Expansion and Enbridge Inc.’s Line 3 replacement, it would be years before rail shipments start dropping again, he said.
“The pipeline industry is not a just-in-time business,” he said, adding that pipelines take years to build so companies like TransCanada need to plan ahead for future oil supply forecasts.
TransCanada’ stock was virtually unchanged on the news.
“We believe that the receipt of the presidential permit was expected by the market,” RBC Capital Markets said in a note to clients. “We note that KXL is not included in our valuation for the stock and if the project moves forward, we view that as upside.”
You’ve been waiting for a long, long time It’s a great day for American jobs, and a historic moment for North America, and energy independence.