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US Approves Keystone XL Pipeline

Monday, March 27, 2017

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President Donald J. Trump’s administration officially reversed his predecessor’s decision on the construction of the Keystone XL pipeline on Friday (March 24), allowing the 1,179-mile oil pipeline to move forward again.

Keystone XL, a project of TransCanada, is part of the larger Keystone system, much of which is already built. It would transport oil from Hardisty, Alberta, in the western Canadian oil sands, to Steele City, Nebraska. The project was rejected by the Obama administration in 2015 after a long review process; Obama said, among other factors, that approving the pipeline would have undercut the United States’ position as a global leader on climate change.

Keystone XL pipe
© TransCanada Corporation. All rights reserved.

TransCanada announced that 200 miles of pipeline that were procured then repurposed after the U.S. originally rejected Keystone XL will be replaced with U.S.-built pipeline.

TransCanada then sued the U.S. government for $15 billion, claiming unfair treatment in the review process.

But Trump’s election last November signaled a new opportunity for TransCanada, which has long argued that the pipeline would create jobs and help reduce America’s reliance on oil from overseas, and that it is unlikely to affect the rate of production in the Alberta oil sands, but will help move the crude oil more efficiently and safely.

US Materials to Increase

Immediately after his inauguration in January, Trump signed a series of presidential memoranda paving the way for TransCanada to re-apply for federal permission to build Keystone XL. At the time, he suggested that TransCanada would be required to build the 36-inch pipeline from all U.S.-made steel, but the administration later clarified that the rule on American materials for pipelines would apply to new pipelines, but not Keystone XL, which was already partially constructed before being shut down by the government in 2015.

Keystone XL route
Meclee, CC BY-SA 3.0, via Wikimedia Commons

Keystone XL (shown in green) would connect the Alberta oil sands with the American Midwest.

Upon the approval of the project, though, TransCanada officials announced that they would increase the amount of U.S. materials used in its construction, replacing 200 miles of pipeline that had been purchased then repurposed with pipeline made in the United States.

Signed by Under Secretary

The new approval was issued by the U.S. State Department, and was signed by Under Secretary for Poliltical Affairs Thomas A. Shannon Jr., as Secretary of State Rex Tillerson, a former Exxon Mobil CEO, recused himself.

KXL protest
By Josh Lopez, CC BY 2.0, via Wikimedia Commons

In  2015, the Obama administration rejected the Keystone XL application, arguing that approving the pipeline would have undercut the United States’ position as a global leader on climate change.

“This is a significant milestone for the Keystone XL project. We greatly appreciate President Trump’s Administration for reviewing and approving this important initiative and we look forward to working with them as we continue to invest in and strengthen North America’s energy infrastructure,” said Russ Girling, TransCanada’s president and chief executive officer.

Keystone XL was approved by Canada’s National Energy Board in 2010.

State Approvals Next

Last month, TransCanada applied for state approval to route Keystone XL through Nebraska. The application with the Nebraska Public Service Commission is “the clearest path to achieving route certainty for the project in Nebraska,” the company says, and should wrap up this year.

The pipeline is also set to run through Montana and South Dakota, were state approvals will be necessary.


Tagged categories: Government; North America; Oil and Gas; Pipeline; President Trump; Program/Project Management

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