Following the one-vote failure of the Keystone XL Pipeline in the U.S. Senate, TransCanada Corp. CEO Russ Girling said Wednesday his company is in for the duration to overcome the high hurdles that still exist for the proposed $7 billion, 1,700-mile pipeline project from Alberta to the Gulf of Mexico.
In the political process leading up to Tuesday night's narrow vote setback, Girling said he saw "a sense of urgency in Congress" that should help when the Senate reconvenes next year. "There is a sense of urgency to get Keystone XL done. We're confident that the project is fundamentally sound, so I think we will get it done."
There were other positive signs, according to Girling, who claims that some of the senators voting against it were not against Keystone. He said these naysayers just didn't think that Congress should act before President Obama makes a decision on national interest.
"We were heartened somewhat by the vote...and appreciate all the support we received from all the people who came forward," Girling said.
In response to a question from NGI, Girling said TransCanada has no plans to try to talk with the White House, but it is working with contacts at the State Department. "The administration has indicated to us that the State Department is the agency to work with, and that is who we are interacting with, and that interaction is continuous," he said.
Having said that the marketplace need for the pipeline has grown over the past six years since Keystone was first proposed, Girling reiterated TransCanada's plans to also get into shipping crude by rail more, even with the company's major pipeline expansions.
"In a probability sense, I would say there is a 50-50 chance that we will be in the rail business in some form or fashion in the future," but it may take some time to nail down agreements to "underpin those investments."
Keystone is still top priority because the marketplace makes it so, said the CEO. He noted that Canadian and U.S. oil production has grown by 1 million b/d and 2 million b/d, respectively, or about three times the size of Keystone (830,000 b/d), so the marketplace need to move crude oil from Alberta and the Bakken to the Gulf Coast has only increased, Girling said.
"Evidence of this is the fact that none of the shippers with 20-year contracts for capacity [on Keystone] has given up capacity, and if they do, we have a list of shippers who will take that capacity, so the market need is there, and we're a market-responsive company.”
Girling reiterated that TransCanada has $2.5 billion invested in the project with steel on the ground and in warehouses, so the project is ready to go once it gets approval to move forward on the federal level and with the resolution of the issues in Nebraska.
If a Nebraska court mandates that the project be taken through a state public service commission review process, Girling said he hopes it can be completed sooner (in seven months or less) than later (a year), but after all of the delays the project has encountered he is not as concerned.
"We would hope the process would be informed by the report done by the state Department of Environmental Quality in Nebraska that completed the review for the governor and his decision,” he said (see Shale Daily, Jan. 23, 2013). "They have the resources, expertise and the people to do that. So we hope we'll be on the short-end of that process."
Ultimately, he doesn't see much more changing of the route in Nebraska, and it should not hold up the "national interest" determination at the federal level.