Canadian Manufacturing

Keystone XL: Plenty of work ahead after State Department review

by Lauren Krugel, The Canadian Press   

Canadian Manufacturing
Environment Operations Energy Oil & Gas environment Keystone XL politics united states

TransCanada Corp. CEO Russ Girling anticipates a busy 90-day comment period in response to report

CALGARY—TransCanada Corp. says it’s pleased with a United States government report into its controversial Keystone XL oil pipeline proposal, but acknowledges there’s some ways to go before it can start construction.

CEO Russ Girling told reporters the report from the U.S. State Department supports many of TransCanada’s arguments in favour of the 830,000-barrel-per-day line when it comes to jobs, environmental protection and the line’s impact on the pace of oilsands development.

But he says TransCanada still has much work to do as a comment period of up to 90 days kicks off.

“This is still an active process, very much, as we move to the national interest determination. I fully expect that there will be a whole host of processes and questions that we’ll have to respond to and participate in,” he said.


“We look forward to that. In our view, I think we’ve got good and solid evidence and answers for all of the national interest determination criteria and we’re very much looking forward to getting on with that process and getting it to completion.”

Girling said about $2-billion has been sunk into the project so far.

About half of the cost encompasses pipe, pumps, valves and other equipment sitting idle.

The rest covers engineering and regulatory work that’s been done so far.

TransCanada has said its most recent US$5.4-billion estimate for Keystone XL will go up materially, but will not say how big of a jump.

Greg Stringham, vice-president of oilsands and markets at the Canadian Association of Petroleum Producers (CAPP), said the report sends positive signals for oil producers eager to get their landlocked crude to the lucrative U.S. Gulf Coast market.

“For me, it really does set a very strong basis for a positive decision and I say that because it’s consistent with some of the analysis that’s been done in the three previous assessments. There’s no big changes in direction or changes in issue,” he said.

The latest assessment includes far more detail supporting the State Department’s view that the pipeline won’t contribute to global climate change by speeding up oilsands development, Stringham said.

He added the report also takes a deeper look into the growing role rail is playing in getting oilsands crude to market.

He adds the report’s market analysis shows it makes no sense for oilsands crude to be exported to China via the Gulf, debunking the claims of many pipeline opponents.

“Really, it says that this oil is destined for the U.S. Gulf Coast and it will get there somehow,” said Stringham.

“They actually say in this report that it’s going to go to the Gulf Coast and it makes all the sense in the world for it to be consumed there and if you are going to Asia, there are other ways to get there.”

Justin Smith, director of policy at the Calgary Chamber of Commerce, described the report as a step in the right direction.

“The completion of this comprehensive environmental assessment will allow the discussion to proceed on the basis of reasoned, researched facts,” he said.

“Increasing access to global markets is a top priority for Canada’s energy industry, and critically important to Calgary’s business community.”


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