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TransCanada Confirms Support for Keystone XL

Friday, January 19, 2018

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Canadian energy corporation TransCanada confirmed Thursday (Jan. 18) that it has garnered sufficient commercial support to continue moving forward with the long-delayed Keystone XL pipeline through the northern Plains states.

The decision comes after months of consideration in the wake of Nebraska's November decision to approve an alternative routing for the 1,179-mile pipeline, which will supplement TransCanada's efforts to move crude from the Alberta oil sands to the Midwest United States. Even after that final major state approval came through, the company continued to work to determine whether it had enough commercial commitment to make the construction of the pipeline viable.

Keystone XL
© TransCanada Corporation. All rights reserved

The Keystone XL project was first proposed in 2008 and preliminary construction began before the pipeline was rejected by federal regulators in 2015.

TransCanada's announcement Thursday noted that the company had secured about 500,000 barrels per day of firm 20-year commitments for the line, enabling it to move forward with construction. It will continue to seek more commitments to bolster the strength of the project.

The firm says construction preparation has begun and it is working with landowners to obtain the necessary easements to build the line.

Project History

Keystone XL, which would carry crude oil from Alberta to Steele City, Nebraska, was first proposed in 2008 and went through years of environmental reviews and regulatory holdups before the U.S. State Department rejected the pipeline in November 2015. The project was thought to be dead in the water at that point, though procurement of some of the materials had already begun.

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

The firm says construction preparation has begun and it is working with landowners to obtain the necessary easements to build the line.

President Donald J. Trump invited the company to resubmit its application for federal permission when he took office in January 2017, and the government overturned the previous rejection in March.

In November, Nebraska, the last state on the line's proposed route to still be considering whether or not to permit construction, approved the so-called Mainline Alternative Route for the line. The Mainline Alternative co-locates with established rights-of-way, including the existing Keystone Pipeline, over more miles than the preferred route, which, the commission says, was originally established simply because it was the shortest possible route between Hardisty, Alberta, and Steele City.

This route will make emergency response quicker and easier, the PSC said in its decision, and would maximize monitoring resources. The alternative route also minimizes the environmental impact of the project.

Even after the federal and state approvals came, there was some question as to whether TransCanada would find the project to be commercially viable given changing trends in the oil and gas trade. Canadian oil exports, while still primarily destined for the U.S., are beginning to diversify as demand in Asia rises. The U.S. is predicted to become a net exporter of oil in the coming decades, but the construction of Keystone indicates that there is still demade for Canadian oil in the States.

   

Tagged categories: Government; NA; North America; Oil and Gas; Pipelines; Program/Project Management

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