TransCanada weighs alternative routes to save Keystone XL

TransCanada Corp. has begun studying alternative routes for the Keystone XL project in an attempt to salvage the $7 billion pipeline after U.S. officials said it couldn’t proceed without more review.

“We needed this project before yesterday’s announcement,” Sean McMaster, general counsel for Calgary-based TransCanada, said in an interview in Houston today. “We’re going to do what we can to move this project forward.”

Yesterday, the U.S. State Department ordered more consideration of alternate routes for Keystone XL to avoid environmentally sensitive areas in Nebraska. TransCanada Chief Executive Officer Russ Girling had previously said any delay would “seriously jeopardize” the project. The review may be finished as soon as early 2013, the State Department said.

McMaster said 14 routes were studied and the path chosen was determined the best. The company has been trying to avoid a delay in the project since TransCanada and shippers want the project completed as soon as possible, he said. Some alternatives inside and outside of Nebraska would avoid the Sandhills region, which is of concern to environmental groups.

“To move it, would have led to exactly what we’re in now – - some significant delay, and we didn’t want to go down that route,” McMaster said. “Now, we’re there. We’re forced to be there, so we’ll consider alternative routes.”

Political Decision

TransCanada was “surprised” by yesterday’s announcement and believes it was a “political decision,” McMaster said.

“I hate to be a cynic, but this latest delay conveniently moves the approval just past the presidential election,” he said.

The 1,661-mile (2,673-kilometer) Keystone XL pipeline would deliver 700,000 barrels a day of crude from Alberta’s oil sands to the Gulf of Mexico by crossing Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Re-routing would require 250 additional miles of pipe and increase the cost of the project by $1.6 billion, according to a State Department report.

4 Comments

  1. Steven

    I’m tired of (especially international) corporations thinking they have some inalienable right to do as they please. Plenty of American citizens don’t want this, and for good reason. Oil companies don’t exactly have a great record on protecting the environment, and the Ogallala aquifer must be protected. I still believe in the power of the people, not politicians and not corporations. This is our country, and our leaders have to answer to the citizens…and it’s about time they wake up and start paying attention instead of being whores to the corporations.

    #1
  2. ntangle

    Were I in their shoes, I’d consider building a line from Cushing to the Gulf Coast anyway. They already have a line as far as Cushing, although I don’t know how “full” it is. But doing so might undercut a bit of their argument for the political necessity of approving a brand new, more direct route. Bet they wish their existing line had more capacity.

    #2
  3. Concerned Canadian

    Knowing that this will now hurt Canadian Oil sands producers, as their ramping up of production will now not have a market to service, can anyone point me to links which quantify the economic impacts.

    I’m curious how much investment will slow.
    How much employment slow, I suspect it will only be new hiring that will not occur.
    How much of a discount is forcasted to impact Canadian crude prices.

    I am especially interested in the possibility of the Gateway pipeline to ship 500 000 bbls/day to the west coast, where it will be shipped to China.

    #3
  4. Buddy

    Steven,

    You miss the point. It doesn’t matter if you’re a “whore” to the corporations or a “whore” to the environmentalists…you’re still a “whore”. Why don’t you get a current map overlay of all the pipelines that currently pass over the aquifer and tell me where you were when those were installed. It will boggle your mind.

    #4