Shale Daily / NGI All News Access

Keystone XL Re-Application to Feds Two Months Away

The promised re-application of a newly split two-part Keystone XL oil pipeline project to the U.S. State Department is still six to eight weeks away, a Calgary, Alberta-based spokesperson for TransCanada Corp. told NGI's Shale Daily.

It is probably going to happen in May, said the spokesperson for the Canadian sponsor of the $7 billion project, which overall now would cover about 1,700 miles divided into two phases. Since being revised in the wake of the State Department's rejection of an initial application in January, TransCanada decided to reapply for the first half of the proposed oil line from the Canadian-U.S. border at Alberta and Montana to Steele City, NE (see Shale Daily, Feb. 28).

The pipeline company said it eventually would file a supplement to the new application with an alternative route in Nebraska, aiming to avoid the environmentally sensitive Sandhills region in the state. TransCanada's spokesperson said at this point he had nothing new to report on the discussions between Nebraska officials and TransCanada.

"We're still moving forward on the reroute plans, but that hasn't been confirmed yet [by Nebraska]," the spokesperson said. "That won't stop us from refiling the application, though."

In the meantime, the company is working to pursue the second phase of the pipeline running from the Cushing, OK, oil storage hub to the Gulf of Mexico (GOM) as the newly designated Gulf Coast Project.

Separately, last week Amherst, MA-based Regional Economic Models Inc. (REMI) released a report on Keystone XL's economic impact, purporting to resolve the differences between earlier economic analyses by TransCanada's consultants, the Perryman Group, and Cornell University's Global Labor Institute. REMI suggested that previous job-creation estimates were either too high or too low.

REMI's study concluded that the Keystone project in total could create up to 16,000 jobs during a two-year period. While the Perryman Group works projected up to 13,000 construction jobs and 20,000 new jobs overall, Cornell disputed the 13,000 figure, saying it would be about half: 6,500 new construction jobs (see Shale Daily, Nov. 9, 2011).

REMI economists Scott Nystrom and William Wade used the REMI model in analyzing both the Perryman and Cornell studies. Along with forecasting 16,000 new jobs, Nystrom said after the first two-year period, 800 permanent jobs would be created.

"The pipe will increase competition between Canadian and Middle East crude producers for position in the GOM and Midwest refineries but will not affect refined product prices," Wade said.

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