Only two days after President Donald Trump signed an executive order inviting the revival, TransCanada Corp. submitted a fresh application late Thursday to construct the hotly contested Keystone XL pipeline for Alberta oilsands exports.
But a brief announcement of the filing for a presidential permit by TransCanada President Russ Girling made no attempt to answer the cloud of questions hanging over the nine-year-old project, which former President Barack Obama rejected in November 2015.
Keystone XL remains a plan for 830,000 b/d to travel in pipeline 36 inches in diameter across 523 kilometers (327 miles) of Western Canada and 1,400 kilometers (875 miles) of the United States, from a central Alberta storage and shipping hub at Hardisty to a southern Nebraska counterpart at Steele City. Established lines would take the oil to the Texas coast of the Gulf of Mexico.
Girling’s statement repeated the vintage case for Keystone XL as a prop for North American energy security, construction job creator and future state and federal taxpayer. But he gave no hint of how TransCanada plans to comply with Trump’s request for a new, improved deal on U.S. citizen employment and other economic benefits.
Nor did the Calgary pipeline firm provide an updated cost forecast, a target date for finishing construction, or any hint about the fate of a US$15 billion free trade complaint and lawsuit filed over Obama’s decision a year ago.
Canadian industry analysts viewed the revived application as the opening move on unpredictable negotiations with the new Trump administration. The new project package that emerges from Washington is in turn expected to require fresh work on transportation service contracts with oil shippers.
TransCanada has predicted that delays and regulatory expenses to date alone could double Keystone XL’s price tag into the US$10 billion area from the original US$5.4 billion construction budget. Steep oil price declines since the project entered the regulatory arena in 2008 are expected to sharpen shippers’ focus on costs. The plan calls for deliveries of 730,000 b/d from Alberta and 100,000 b/d from the Bakken Shale region in North Dakota and Montana.
At the political level in Canada, federal and Alberta provincial leaders voiced support for reviving Keystone XL yet also urged the industry to give top priority to newer projects proposed to diversify its markets via tanker terminals on the Pacific and Atlantic coasts.
Girling insisted that Keystone XL deserves to rank high on the U.S. economic agenda. “The project is an important new piece of modern U.S. infrastructure that secures access to an abundant energy resource produced by a neighbor that shares a commitment to a clean and healthy environment.”
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