Armed with shipping commitments despite low crude prices, key pipeline operators are proceeding with many projects to alleviate the bottlenecks, which could add as much as 8.7 million barrels per day by 2018, Reuters data shows.
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TransCanada spokesman Mark Cooper told CBC News the company simply wants the State Department to wait until the application has been approved by Nebraska. “Secretary Kerry should reject TransCanada’s request for delay, and President Obama should immediately reject the Keystone XL pipeline once and for all”.
It was an unusual reversal of roles for TransCanada, which complained bitterly for years about Obama’s delays before suddenly requesting one of its own.
The rationale, according to the letter TransCanada sent Secretary of State John Kerry, is to await a decision by regulators in Nebraska about a possible change to the pipeline’s route. As the pipeline route through Nebraska has been the subject to a court case in the state over whether former Gov. Dave Heineman was entitled to approve the route or not.
“The easiest answer is that politically, they think a Republican administration would be more prone to approve such a pipeline”, said Carey King, assistant director of the Energy Institute at the University of Texas at Austin.
TransCanada decided in September to apply for an additional regulatory review of the line in Nebraska and back off from conflicts with landowners.
Republicans in Congress have uniformly championed the project, which developers say will create 40,000 jobs, while party candidates for the presidency have taken clear positions in favor of the pipeline.
“We’ve tried to stay out of the politics of this situation and focus on the things that we’re capable of doing and can control and that’s the regulatory process”, Girling said.
But TransCanada CEO Russ Girling, in a conference call to discuss corporate earnings Tuesday, said Keystone remains economically viable for the company, noting that oil prices are about the same now as they were in 2008 when the company first applied. “But while that takes place we’re not going to pause”, said State Department spokeswoman Elizabeth Trudeau.
The following year, a Nebraska lawmaker who supported the pipeline pushed through legislation that gave TransCanada a second way to win approval.
For TransCanada, a delay would be relatively well timed, coming amid a crude price collapse that has prompted a few energy companies to halt Canadian oil sands projects and lessened a few of the clamor for new options to move the bitumen harvested in Alberta. In the event Nebraska rejected the plan, TransCanada would have to submit a new route to both Nebraska and the State Department anyway.
Jaccard said there are two arguments about Keystone XL’s climate consequences: One, tar sands oil will find other ways to market despite Keystone XL, meaning that a delay or cancellation of Keystone XL could have little impact on the tar sands’ greenhouse gas emissions. The decision comes just weeks before President Obama travels to Paris for an global climate summit.
Because it must cross the Canada-U.S. border, Keystone XL requires a Presidential Permit asserting that it is in the USA national interest. Now TransCanada is calling for a pause while opponents urge Obama to quickly deny the company’s request for a presidential permit. The White said on Tuesday that the president wants to rule on the pipeline before he leaves office. “That’s their only pathway to victory”, she said.
“This is President Obama’s decision, and he shouldn’t cave to a foreign oil company trying to twist his arm into punting it to future presidents”, Zarlin said.
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The recent election of Liberal Prime Minister Justin Trudeau could change the contours of the Keystone debate.
