Keystone XL closer to a start
TransCanada says it has the customer support to build it
TransCanada said it has received enough customer support to build the Keystone XL pipeline and will continue to press forward with the $5.2 billion project.
The Canadian pipeline company, however, said it hasn’t decided definitively to start construction of the much-delayed and disputed pipeline, which isn’t scheduled to begin until 2019.
“Over the past 12 months, the Keystone XL project has achieved several milestones that move us significantly closer to constructing this critical energy infrastruc-
ture for North America,” said TransCanada CEO Russ Girling, crediting President Donald Trump for helping revitalize the project that was rejected under the Obama administration.
Over the past several years, Keystone XL became a focal point of the environmental movement, which raised concerns about climate change as it opposed the pipeline that would carry up to 830,000 barrels a day of crude oil from Canada’s tar sands through the already completed southern leg of the Keystone system that terminates near Houston and Beaumont. TransCanada, which is headquartered in Calgary, employs nearly 1,000 people in Houston.
TransCanada said Thursday it has secured commitments that would result in 20-year contracts to carry about 500,000 barrels a day. That’s enough to justify moving forward, said TransCanada, which is working to contract the remaining capacity.
Environmentalists, however, downplayed the milestone and the likelihood the project will be built.
“It’s just bluster from TransCanada to pretend that this unnecessary and unwanted pipeline is close to proceeding,” said Patrick McCully, climate and energy program director at the Rainforest Action Network, an advocacy group in San Francisco. “It still faces enormous regulatory and legal hurdles and continued fierce opposition from landowners, farmers, indigenous peoples and activists alike.”
The Keystone XL portion would be built through Nebraska to tie into the Keystone network. In November, the Nebraska Public Service Commission voted to approve the Keystone XL route through the state. TransCanada said it is reaching out in the communities where the pipeline will be built and working with landowners to obtain the necessary easements for the approved route.
Keystone XL still faces several legal challenges, but its completion would be important to Gulf Coast refineries. While Texas’ oil production is again booming, most of the state’s oil is lighter than the heavier crude that Gulf Coast refineries are designed to process. Houston-area refineries were built when the nation relied on thicker foreign oil, so they will continue to import crude.
With production sinking in one traditional source, Venezuela, Gulf Coast refineries are relying more on heavy Canadian crude.