2015 start for Keystone ‘difficult,’ says Girling
Transcanada CEO also looking east
neW yorK — TransCanada Corp. chief executive officer Russ Girling said the timeline for U.S. approval of the $5.3-billion Keystone XL pipeline project will make the start of operations in the second half of 2015 “difficult.”
Girling said a final environmental impact statement from the U.S. State Department may come in “weeks, not months,” after which there will be a 90day review of whether the project is in the U.S. national interest. “I hope a decision can be made this year,” Girling said Thursday.
If approved, Calgary-based TransCanada needs 24 months to build the pipeline, which would connect oil production from Alberta to refineries on the U.S. Gulf Coast. U.S. President Barack Obama initially rejected the project in January 2012, citing concerns with its path through ecologically sensitive lands in Nebraska. The company reapplied with a new Nebraska route last year and split the project in two, building the southern portion that doesn’t require a permit first.
Girling also said Thursday the company may announce shortly it will go ahead with a separate link to transport oil to Canada’s Atlantic coast.
Advancing Energy East, a 4,400-kilometre partial conversion of its Mainline natural gas line, looks “very, very promising,” Girling said. The company finished receiving binding commitments from shippers on Wednesday and is working through contractual details, he said.
“Hopefully, in the near term, we’ll be in a position to announce a project going to the East Coast, but it won’t be tied to Keystone,” Girling said. “I think we’re going to need Keystone, I think we need an Energy East.”
The Energy East proposal involves carrying as much as 850,000 barrels a day of crude from Western Canada to re- fineries in Montreal and Saint John, N.B. The crude could then be shipped by tanker to facilities on the U.S. Eastern Seaboard and as far away as India, Girling said. The oil will pre-dominantly be upgraded bitumen from the oilsands and light oil from Sas-katchewan, he said.
In September, the Keystone XL project will reach its sixth anniversary from the initial application date, Girling said. The company in April bumped back its target to complete the line to the second half of 2015, forecasting costs will rise amid delays receiving the needed
Denial of this pipeline is
not in any way rational
RUSS GIRLING
approvals for construction.
TransCanada continues to incur costs to store the equipment it has already purchased and to maintain the pipe, in some cases by recoating the steel, Girling said. The company won’t update its cost estimate until after receiving U.S. approval, he said.
The U.S. State Department, which must approve Keystone XL because it crosses an international border, has told TransCanada it expects to need the full 90-day period for the national interest review, during which eight agencies weigh in on whether to approve the presidential permit. The department was 79 days into the national-interest decision when a Congressional deadline forced Obama to reject the first application, Girling said.
“There is only one rational decision here,” Girling said. “Denial of this pipeline is not in any way rational. At best, it’s symbolic.”
Halting the pipeline will make no difference on greenhouse-gas emissions, he said. “It will actually just impose greater risks on public health and safety.”
An explosion of a runaway train carrying oil in Lac-Megantic, Que., on July 6, which left as many as 50 dead or unaccounted for, stirred the debate over the safety of transporting crude by rail versus pipelines.
The better safety record of pipelines over rail was clear before the Lac-Megantic disaster, Girling said.
“Statistically, you can look at the history. Pipelines are the safest way to transport large volumes of hydrocarbons over long distances,” Girling said. “That’s a fact and doesn’t really need to be debated.”