TransCanada Granted US Permit for Keystone XL Pipeline – Bloomberg
After more than 8 years of political haggling over both its future and its benefits, the Keystone XL oil pipeline running from Canada to America’s heartland has been approved by President Donald Trump.
The move overturns a 2015 decision by former President Barack Obama. During his campaign, Trump vowed to support energy companies and advocate for new infrastructure. After taking office, one of his first acts was to invite TransCanada Corp., the pipeline’s builder, to reapply for approval. The $8 billion project will span 1,179 miles (1,897 kilometers), crossing Montana, South Dakota and Nebraska, where it will connect with the existing Keystone system, which runs to the Gulf Coast.
“This is a significant milestone for the Keystone XL project,” said TransCanada Chief Executive Officer Russ Girling in a statement announcing the approval. “We greatly appreciate President Trump’s Administration for reviewing and approving this important initiative and we look forward to working with them.”
Trump is scheduled to speak about his decision at 10:15 a.m. in Washington, according to White House Press Secretary Sean Spicer.
The company will end its claim under Chapter 11 of the North American Free Trade Agreement and its U.S. constitutional challenge, according to the statement. TransCanada will “continue to engage key stakeholders and neighbors” in Nebraska, Montana and South Dakota to obtain required permits and approvals for the project’s construction, the company said.
The company’s shares rose 3.7 percent in pre-market trading in New York.
Pipeline opponents are gearing up legal challenges, and the project still must get state approvals.
“A federal approval of the permit is not the end of the line for this project; there’s still many obstacles,” said Anthony Swift, an attorney with the Natural Resources Defense Council that opposes Keystone, in an interview before the approval was granted. “There’s legal challenges, there’s the Nebraska issues and, frankly, there are the economic and market obstacles.”
Fossil fuel opponents argue Keystone XL will encourage the development of Canadian oil sands crude, which generally requires more energy to extract and process, and that it endangers drinking water resources in America’s heartland.
The approval comes as another controversial project stalled by the Obama administration, the Dakota Access pipeline, nears completion after legal actions by protesters fell short. Energy Transfer Partners LP, the majority owner, is now filling the pipeline, and has said it will begin shipping oil in the first half.
Both Keystone XL, designed to carry 830,000 barrels of oil a day, and Dakota Access, with a capacity of 470,000 barrels, have been flashpoints for fossil fuel opponents who argue they’ll damage the environment, exacerbate global warming and offer minimal financial advantages to the country.
Obama’s administration supported that view, rejecting the project after a State Department review found Keystone didn’t serve the national interest. Trump has said the development of new energy projects will secure U.S. independence from other other producers, add jobs and help spark the economy.
“After many years of unfortunate delays and partisan posturing, Keystone XL pipeline finally got the green light it has long deserved,” U.S. Chamber of Commerce CEO Thomas Donohue said in a statement Friday. “Today’s action should send a clear message to investors, and important strategic partners like Canada, that things have changed in Washington. ”
Earlier this month, Secretary of State Rex Tillerson, who formerly served as Exxon Mobil Corp.’s chairman and CEO, recused himself from the agency’s deliberations. Tillerson was a vocal advocate for Keystone while at Exxon, saying it would improve U.S. energy security and competitiveness.
The permit was signed by Under Secretary of State for Political Affairs Thomas Shannon, according to a statement from the agency.
TransCanada also reapplied for approval in Nebraska, a state that created legal hurdles for the company during the initial project review. Keystone generated heated opposition from landowners in the pipeline’s path who challenged state laws that helped determine the route. TransCanada eventually surrendered to a review by the state Public Service Commission before the project was rejected in its entirety by Obama.