WASHINGTON — The long government review of Keystone XL may dissuade companies seeking to build other pipelines across U.S. borders, TransCanada CEO Russ Girling warned Wednesday.
Going beyond TransCanada’s proposed Keystone XL project, there will be “additional market need” for cross-border pipelines to transport oil and gas across North America, Girling told reporters in a conference call.
“But in order for that investment to occur and for that efficient transportation infrastructure to be put in place, I do believe we are going to need greater clarity before people are going to be willing to step up and commit their capital to these processes,” Girling said. “At the current time we are about $3 billion dollars into this process, and I can tell you it’s not a very comfortable place to be not knowing what the criteria or what the end of the regulatory process looks like.”
Girling made his comments hours before the House of Representatives is expected to clear legislation that would authorize the Keystone XL pipeline, sending it on to President Barack Obama for a threatened veto.
That veto would leave the State Department in charge of vetting whether the proposed pipeline is in the “national interest,” possibly conducting new market studies analyzing the project in light of low oil prices.
The Environmental Protection Agency last week urged such a review, suggesting that plummeting crude prices could make the proposed pipeline vital to Canadian oil sands developers that otherwise face higher costs to ship by rail.
In a letter to the State Department on Tuesday, Girling fought back against the suggestion, insisting that the fate of Alberta oil sands projects won’t be determined by a single energy infrastructure project.
The five-page letter also delved into claims that the diluted bitumen that would be carried through Keystone XL — along with some light U.S. crude — produces more greenhouse gas emissions than alternatives.
Girling stressed Wednesday that the best “apples to apples” comparison is with the heavy crude U.S. refineries import from Venezuela and Mexico.
“When you look at the carbon emissions from Canadian crude relative to those competitive crudes that are coming into the U.S. every day, they are very similar, and in some cases, those crudes that are coming from those offshore locations actually have a higher GHG intensity,” Girling said. “So if you’re thinking about it from an incremental perspective, if we’re moving crude into the marketplace that has a similar GHG emissions profile as what we are displacing, there are no incremental emissions generated from that.”
Girling said TransCanada sent the letter to the State Department to inform its review of the project. EPA is one of eight federal agencies that had a chance to provide formal input on the State Department’s national interest determination.
So far, Girling said, TransCanada has not seen those comments.
State Department spokeswoman Jen Psaki has told reporters they are not being released because they are viewed as internal documents. That’s the same message TransCanada is hearing from State too, Girling said.
It is not clear whether the State Department will spend more time analyzing low oil prices and other market conditions as part of its Keystone XL review.
While Girling said TransCanada is “not anticipating any delay,” he acknowledged the possibility.
“We are not anticipating at this point in time any additional process,” he said. “All we’re saying is we have basically seen this movie before, where the Department of State has a desire to ensure that the record is complete, and we want them to know that we have supported that process in every way that we can for the last six and a half years and that support for the process continues until we get to a final conclusion.”