Keystone zeal cools for producers with more shipping options

2008 Application

TransCanada first submitted an application for the pipeline, which now has a $5.4 billion price tag for the cross- border segment not yet completed, in September 2008. Opponents argue the project would stimulate production of Canada’s pollution-heavy oil sands and lead to higher greenhouse-gas emissions that contribute to climate change.

The U.S. report concluded Keystone XL wouldn’t worsen climate change to the extent its critics say. The approval process now moves on to a 90-day assessment of whether Keystone is in the U.S. national interest, a review that includes economic impact. There’s no deadline for Obama’s decision.

The report “is another important milestone in completing the regulatory review in what is a critical piece of North American energy infrastructure,” TransCanada Chief Executive Officer Russ Girling said on a conference call with reporters after the report was published.

‘Defective’ Analysis

Billionaire Tom Steyer, a Democratic Party donor and Keystone XL foe, called on U.S. Secretary of State John Kerry to begin a review of the “defective” environmental analysis on the pipeline. The final environmental impact statement on Keystone “has suffered from a process that raises serious questions about the integrity of the document,” Steyer wrote to Kerry in a letter.

The pipeline remains important for Canada’s economy. Oil is the country’s most valuable export, with shipments worth about C$73 billion ($65 billion) in 2012, according to the national statistics agency. Almost all Canadian crude exports go to the U.S., especially to Midwest refineries.

“We’re an oil and gas producer with only one customer,” Alberta Finance Minister Doug Horner said during a Dec. 5 conference call. “As our production continues to grow, we need other outlets to other markets to get better prices.”

Keystone XL, with startup planned for 2016, is one of the first steps needed to expand Canada’s exports. The pipeline would link oil-sands output in Alberta with the world’s largest refining center on the U.S. Gulf Coast.

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