Canadian Manufacturing

U.S. EPA’s call for further Keystone XL review a delay tactic: TransCanada CEO

Said suggestions that environmental impacts of pipeline be revisited in light of lower crude prices merely a tactic to delay project

TORONTO—Suggestions that the environmental impacts of the Keystone XL pipeline be revisited in light of lower crude prices are merely a tactic to delay the project, TransCanada Corp.’s CEO claims.

Russ Girling said global demand for oil will continue to grow over the coming years, and that volatile crude prices do not mitigate the need for pipelines to transport that oil.

“At US$50 a barrel, the oilsands are still going to get developed anyway,” Girling told reporters following his speech at the Toronto Region Board of Trade.

“And I don’t think that you need to have another market study to tell you that.”

The United States Environmental Protection Agency (EPA) has suggested that in light of the recent drop in oil prices the State Department revisit how big of a toll the Keystone XL pipeline would have on global warming.

Pipeline supporters have argued that approving the project would not boost greenhouse gas (GHG) emissions because the crude would get to market regardless—if not by pipeline then by rail.

But the EPA said in a letter issued Feb. 3 that the slide in crude prices has created tough economic conditions for oil producers and that in absence of a pipeline, oil production—and emissions—will likely be reduced.

That means that by extension, a pipeline would lead to higher emissions, according to the EPA.

TransCanada’s US$8-billion project would allow 830,000 barrels per day of crude to flow from Alberta’s oilsands to refineries on the U.S. Gulf Coast.

The project has been mired in delays since it was first proposed six years ago.

Because the pipeline would cross over into the U.S., it requires approval by President Barrack Obama.

Congress has tried to force Obama’s hand by introducing a Keystone XL bill, which the president is expected to veto.

But Girling said a veto from the president wouldn’t be a death knell for the pipeline, as the proposed legislation is separate from the State Department’s ongoing regulatory process.

“If (the bill) is vetoed I believe we are exactly where we were before, which is with the State Department process,” Girling said.

“That doesn’t mean that the political agitation on this project is going to go away, by any means. This is an issue that many people have a great interest in and will continue to be agitated by. But the State Department process is the process we’ve been participating in for the last six years, and have met every threshold and hurdle that they’ve set out.”

While Keystone XL continues to be mired in delays, TransCanada has been pushing forward its $12-billion Energy East pipeline, which would span 4,500 kilometres and carry more than one million barrels of crude per day from Alberta to refineries and export terminals in Quebec and New Brunswick.

However, part of the plan, which involves building an export terminal along the St. Lawrence River in Quebec, has been put on ice over concerns about potential impacts on beluga whales.

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