TransCanada makes final appeal for Keystone XL

WASHINGTON — Keystone XL is the safest and most environmentally sound way to transport Canadian and North Dakota oil to Gulf Coast refineries, TransCanada Corp., said in its last-ditch appeal for the pipeline’s approval.

The Calgary-based company made the assertions in a 35-page filing with the State Department, rehashing mostly old arguments that the proposed border-crossing pipeline should win a presidential permit. TransCanada’s arguments were released Tuesday but filed along with more than 100,000 others during a government public comment period that ended Friday.

The State Department will examine the public comments — as well as feedback from several agencies due in two months — as it decides whether Keystone XL is in the national interest — a legal determination that folds in economic, environmental, security and other concerns.

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TransCanada casts the decision as a no-brainer. The company’s arguments boil down to a few major points:

  • Other alternatives for moving bitumen harvested in Alberta’s oil sands and crude extracted from the Bakken formation would have a bigger carbon footprint and could be less safe. A State Department analysis suggested that injuries and fatalities associated with moving the crude to the Gulf Coast would be higher if it were transported by rail, trucks or other means, instead of Keystone XL.
  • Beyond climate concerns, significant environmental impacts are not expected along the pipeline’s proposed route.
  • The pipeline will help diversify U.S. energy supply. According to TransCanada, “the project would serve to enhance United States energy security by connecting reliable domestic and Canadian supply sources to refinery markets in the Gulf Coast area with a demonstrated demand for these supplies.”
  • The U.S.-Canada trade relationship is about as stable as they  get, and it makes sense for the United States to deepen energy ties with Canada, instead of more volatile crude suppliers.

The pipeline would yield  benefits for regional economies along its route, as well as the U.S. as a whole, both from short-term construction and long-term operation. TransCanada estimates that construction of Keystone XL would contribute about $3.4 billion to the U.S. gross domestic product.

TransCanada also highlights environmental efforts taken by Canada and companies working north of the border, including restrictions on coal-fired power plants and reductions in the greenhouse gas emissions tied to energy-intensive oil sands production. Some analysts believe that environmental steps taken by Canada — or further green regulation inside the U.S. — could form the basis for Keystone XL’s approval.

But more than a dozen environmental groups, including Sierra Club, the Natural Resources Defense Council and Friends of the Earth, said in joint comments that Keystone XL would boost air pollution at refineries, carry the risk of tough-to-clean spills and “would not lead to energy independence.”

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The groups also argued that if the Obama administration approves Keystone XL, it could undermine the success of the clean energy sector. While the State Department estimates that Keystone XL would support just 50 long-term jobs directly, the environmental groups say alternative energy projects have much greater potential.

“Approval of Keystone XL, which would send a signal that North America intends to build its economic future on dirty fuel rather than clean energy likely would lead to job loss in other sectors of the economy that are at the cutting edge of the green economy,” the groups said. “If the U.S. locked in long-term dependence on the dirtiest of fuels, then green investments will surely suffer.”

The organizations also argue that the State Department’s analyses of alternatives to Keystone XL — including the relative safety and carbon footprint of transporting crude by truck or rail — are fundamentally flawed. The State Department’s conclusions were built on assumptions that “a vast network of rail infrastructure will be built where none is currently approved or even proposed,” and it is hard to envision such massive expansion of rail lines and loading capacity, the groups said.

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The State Department analysis papered over the regulatory hurdles to the Keystone XL alternatives and the “uncertainty” of the other options to transporting Canadian crude across the U.S., they added.

While TransCanada’s filing made little mention of a Nebraska court ruling that throws the pipeline’s route through the state in legal dispute, environmentalists insisted the development should preclude a final national interest decision.

“The recent ruling means that there is currently no approved route for Keystone XL through Nebraska,” the groups said. “The state approval process is currently on hold. . . . The federal agencies, as well as members of the public, cannot provide meaningful comments on whether Keystone XL would serve the national interest when the route through Nebraska has not yet been determined.”

While the bulk of Keystone XL’s capacity is dedicated to Western Canadian crude — and TransCanada said it had contracts to transport more than 500,000 barrels per day of the stuff –the company still has free space for oil pulled from the Bakken formation in the United States. TransCanada reiterated that it currently has “firm, long-term contracts” to transport just 65,000 barrels per day of Bakken crude oil from the Williston Basin in North Dakota and Montana — roughly two thirds of its 100,000 barrels-per-day maximum capacity for that U.S. crude.

The constraint comes in the capacity of TransCanada’s Bakken Marketlink project for filling Keystone XL with the U.S. crude.