Keystone XL setback will cost Canadian industry ‘millions’
CALGARY — The Canadian oil industry reacted with frustration Friday after a
U.S. judge ordered a halt to the Keystone XL pipeline project until it passes further environmental review.
The decision on Thursday means longer delays in finding a way to drain a glut of oil in Western Canada that has driven price discounts to multi-year highs and stalled investment, said Tim Mcmillan, CEO of the Canadian Association of Petroleum Producers.
“It’s a vulnerability that we can’t control and will cost us hundreds of millions if not billions of dollars as a nation and thousands of jobs,” he said Friday.
“And the only reason it does have such a massive impact on us is self-inflicted wounds here at home on projects that could have given us resilience against this sort of ruling.”
U.S. District Judge Brian Morris found Thursday that the potential impact of Transcanada Corp.’s $10-billion pipeline had not been considered as required by federal law. Environmentalists and Native American groups had sued to stop the project, citing property rights and potential oil spills.
The judge, who was appointed by former president Barack Obama, issued a federal court order blocking a Trump administration permit for construction of the pipeline.
Transcanada remains committed to the project, spokesman Terry Cunha wrote in a brief e-mail on Friday.
The Calgary-based pipeline company’s shares fell by as much as 2.75% in early trading but recovered to $51.49, down 1.4%, by 3 p.m. EDT on the Toronto Stock Exchange.
Last January, Transcanada said it had secured shipping commitments of roughly 500,000 barrels per day on the line, including a deal with the Alberta government to ship 50,000 bpd.
“This ruling by a foreign court underscores once again the urgent need for Canada to build pipelines within our own borders, including the Trans Mountain expansion,” said Alberta Energy Minister Marg Mccuaig-boyd in Edmonton.