By March 24, 2017 Read More →

Trump approves Keystone XL pipeline, but a lot of work ahead for TransCanada

Keystone XL

U.S. President Donald Trump’s administration approved the Keystone XL pipeline on Friday. Reuters photo by Kevin Lamarque.

Keystone XL rejected by President Obama

President Donald Trump and his administration approved the TransCanada Keystone XL pipeline on Friday, a move welcomed by the Canadian and American oil industry, but one that angered environmentalists who have sought to block the pipeline for years.

Trump’s approval of the pipeline is one of many steps that TransCanada will have to take to build the contentious crude pipeline.  TransCanada needs to get financing, acquire local permits and fight legal challenges that are likely to come.

“It’s not done yet,” Michael Wojciechowski, vice president of Americas, oil and refining markets research at consultancy Wood Mackenzie told Reuters.

At the White House, President Trump and his team were joined by TransCanada CEO Russ Girling and Sean McGarvey, president of North America’s Building Trade Unions for the announcement.


Reuters reports Trump said “TransCanada will now be able to complete this long overdue pipeline with efficiency and speed,” adding the decision was “part of a new era in America” to lower consumer fuel prices, create jobs and achieve energy independence.

Soon after the announcement, TransCanada’s US-listed shares rose 0.77 per cent to $46.62, after jumping as much as 7 per cent in premarket trading.

The pipeline will transport crude from the Alberta oilsands to US refiners.  The project was shut down by President Obama who argued Keystone XL would not reduce fuel prices for US motorists and would contribute to emissions linked to global warming.

In 2014, the State Department released a study showing the Keystone XL pipeline would create 3,900 construction jobs and 35 permanent jobs.

Trump campaigned on a promise to approve the pipeline, saying it would create 28,000 jobs in the United States and help the oil industry.  Soon after taking office in January, President Trump signed an executive order to advance the project.

Environmental groups have stood strong against Keystone.  Greenpeace has said it will pressure banks to withhold financing for the multi-billion dollar project, while others say they will fight the pipeline in court.

“We’ll use every tool in the kit,” said Rhea Suh, president of the Natural Resources Defense Council.

Since President Obama shut down the project based on an environmental assessment commissioned by the State Department in early 2014, opponents will argue that President Trump cannot reverse the decision without conducting a new assessment.

Along with environmentalists fighting against the pipeline, TransCanada will have to handle local permitting.

“The Presidential Permit is only one part of a web of federal, state, and local permits that must be obtained prior to starting construction,” Fred Jauss, partner at Dorsey & Whitney, international law firm and former attorney with the Federal Energy Regulatory Commission told Reuters.

He added “Other federal agencies, such as the Army Corps of Engineers, state regulatory commissions, and even local planning boards may have requirements that need to be fulfilled by Keystone prior to construction.”

“In addition, TransCanada may still need to reach deals with hundreds of potentially affected landowners on the pipeline’s route. There is a lot of work ahead for TransCanada.”

If approved, the pipeline will transport over 800,000 b/d of heavy crude from Alberta’s oilsands into Nebraska.  From there, the crude could be shipped to US refineries and ports along the Gulf of Mexico via existing pipelines.

The finished pipeline could be a boon for the Canadian oil industry that is struggling to get its landlocked product to market.


“Our Government has always been supportive of the Keystone XL pipeline and we are pleased with the U.S. decision,” a spokesman for Canada’s minister of natural resources told Reuters. “The importance of a common, continental energy market cannot be overstated.”

Jack Gerard, president of the American Petroleum Institute, said the approval was “welcome news” and would ultimately bolster U.S. energy security.


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