Keystone XL moving forward… maybe

posted at 5:01 pm on July 29, 2012 by Jazz Shaw

In case you missed it – and judging by the content of the news cycle lately, you may well have – there has been some progress in the long delayed Keystone XL pipeline project. The progress is in the form of the last permits being approved for at least one of the three major sections of the pipe. This just in from Canada.

Houston, Texas – July 27, 2012 – TransCanada Corporation (TSX, NYSE: TRP) (TransCanada) today announced it has now received the final of three key permits needed from the U.S. Army Corps of Engineers in order to advance the 485-mile (780-kilometre (km)) Gulf Coast Project. With the permit from the Fort Worth, Texas Army Corps district added to previously received permits from the Galveston, Texas and the Tulsa, Oklahoma districts, TransCanada is now in a position to start construction of the oil pipeline in the coming weeks.

“Receiving this final, key Army Corps permit for the Gulf Coast Project is very positive news. TransCanada is now poised to put approximately 4,000 Americans to work constructing the US$2.3-billion pipeline that will be built in three distinct ‘spreads’ or sections,” said Russ Girling, TransCanada’s president and chief executive officer. “The Gulf Coast Project will contribute millions in property taxes to counties in Oklahoma and Texas, money that can be used to build roads, schools and hospitals.”

The pipeline will transport growing supplies of U.S. crude oil to meet refinery demand in Texas. Gulf Coast refineries will be able to access lower-cost domestic production and avoid paying a premium to foreign oil producers, reducing cost and the United States’ dependence on foreign crude oil.

So… good news, right? Environmental challenges have been answered, political blockades hurdled (at least for the moment) and permits have been issued. The changes to the overall business arrangement have been quite favorable to the United States, since our own oil will also be traveling to Gulf Coast refineries, along with Canadian synthetic crude from the oil sands fields. The potential for jobs is very encouraging. So have all the challenges been met and can we close the books on this one? Not quite. There are three primary legs to the full route which are under scrutiny from both sides of the border, and each of them has a few wrinkles left in the fabric.

The first is the Canadian leg leading from the oil sands fields in Alberta to the border crossing at Nebraska.(EDIT) This should have been a done deal by now, but the environmental groups are not going down without a fight. Lobbyists are already pressuring the government to expand the scope of the environmental review process significantly to “address indirect issues of climate change.” That language alone should be enough to tell you that if the government caves, it could drag on for decades of “research.”

The next stretch is the Nebraska Re-Route. Governor Heineman appears set to agree to the new layout which bypasses the Sandhills region, but he may be hogtied by the Nebraska Department of Environmental Quality. The DEQ is demanding that TransCanada release proprietary information about the chemical properties of the diluted bitumen which will flow through the pipes. This is a tactic employed very successfully by natural gas obstructionists in the United States and could hang up the entire deal if a judge gets involved.

And finally we have the Gulf Coast Project, referenced in the article featured at the top of this column. This one sounds like it’s the closest to coming to fruition, but opponents have a few cards left to play. Even though the President claims to be on board and the U.S. Army Corps of Engineers has signed off on their permits, there is yet another, less discussed approval required. This one is from the U.S. Fish & Wildlife Service, (no… I’m not kidding.) and so far they’ve been dragging their feet. Further, our old friends at the Sierra Club are back in court for the umpteenth time, challenging the ACoE’s issuance of the required nationwide permit. All it will take there is for one federal judge to issue an injunction and we’re back to square one of the waiting game.

The politics of the pipeline could still poison the deal as well. Any concrete action will take time to get moving in full gear and there’s only about 100 days until the election. In the event that Barack Obama wins a second term, would he remain as “enthusiastic” about seeing the project move forward? Permits, once issues, may still be recalled if “new questions” arise or “further study” is deemed necessary.

No, things are far from settled, at least as I read the tea leaves. This is some positive news, to be sure, and we should be encouraging Washington to move forward briskly. But I’d hardly call it a iron lock yet. Stay tuned.

EDIT: (Jazz) Thanks to our sharp eyed readers who noted that the American leg doesn’t actually start in Nebraska. However, the next court contested section referenced takes place there. Thanks.


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Shovel ready…

OmahaConservative on July 29, 2012 at 5:04 PM

Just because permit have been issued, does not mean the epa won’t do they nasty thing later? Do you really think bho/team/that means the epa will let the US get OUR own oil/gas/pipelines to be free from foreign oil? This has got to be another smoke/mirrors by bho/team?
L

letget on July 29, 2012 at 5:06 PM

It worked
:O

burrata on July 29, 2012 at 5:09 PM

This is only a section in the southern USA right?

This is nothing.

mockmook on July 29, 2012 at 5:10 PM

“The first is the Canadian leg leading from the oil sands fields in Alberta to the border crossing at Nebraska.”

There is no border crossing in Nebraska. Nebraska is bordered by South Dakota to the North, Iowa to the East, Kansas to the South, and Wyoming to the West.

crosspatch on July 29, 2012 at 5:12 PM

The first is the Canadian leg leading from the oil sands fields in Alberta to the border crossing at Nebraska.

What? Has Nebraska moved?

Curtiss on July 29, 2012 at 5:14 PM

crosspatch on July 29, 2012 at 5:12 PM

We’d love to have a border crossing, though…

OmahaConservative on July 29, 2012 at 5:15 PM

What? Has Nebraska moved?

Curtiss on July 29, 2012 at 5:14 PM

They had to move Nebraska to fit in the 57 states

burrata on July 29, 2012 at 5:17 PM

Short term victory but with a Commander in chief in it for the long haul victory over this nation and it’s evil capitalist system!!

November 6th or Cavez type doom for this country.

PappyD61 on July 29, 2012 at 5:18 PM

Nebraska is bordered by South Dakota to the North, Iowa to the East, Kansas to the South, and Wyoming to the West.

crosspatch on July 29, 2012 at 5:12 PM

Don’t forget Colorado and Missouri!

taternuggets on July 29, 2012 at 5:19 PM

This isn’t going to affect the election. Still a hairball.

a capella on July 29, 2012 at 5:22 PM

I’m thrilled to have made your day on the Nebraska line. Updated. :-)

Jazz Shaw on July 29, 2012 at 5:26 PM

Ya think we can force environmentalists to use special fuel fillers adopters on their cars that are for bio-mass derived fuel only? We did something like this in the 70s when we moved from leaded to unleaded gasoline (the ends of hoses for the leaded gas were bigger and would not fit in the narrow filler hole for an un-leaded gas car). Then the enviros could enjoy paying the $26/gallon our Navy paid to fuel the fleet.

We can’t let them be hypocrites about using bio-mass fuel.

KenInIL on July 29, 2012 at 5:29 PM

climate…..

http://wattsupwiththat.com/2012/07/29/press-release-2/

U.S. Temperature trends show a spurious doubling due to NOAA station siting problems

drill baby drill

dmacleo on July 29, 2012 at 5:47 PM

Lobbyists are already pressuring the government to expand the scope of the environmental review process significantly to “address indirect issues of climate change.”

What is needed is a judge with the balls to say:

‘Go ahead and file your objections. And to level the playing field, in filing those objections, you will be required to post a bond equal to the amount of costs increases the pipeline will bear while the case proceeds. If you lose, you will LOSE big.’

GarandFan on July 29, 2012 at 5:53 PM

The DEQ is demanding that TransCanada release proprietary information about the chemical properties of the diluted bitumen which will flow through the pipes.

So, TransCanada releases a “proprietary” chemical description of the diluted bitumen it “plans” to use to ship through the pipeline. Once the pipeline is in place, whatever flows through it is based upon latest and most relevant technology. Whatever that happens to be at the time.

/so tired of these petty bureaucrats gumming up progress. Give ‘em something and do what you want to do later.

AZfederalist on July 29, 2012 at 6:13 PM

0bama will be more flexible after the election. Investors should be very cautious about moving forward until we are sure 0bama has issued his last EO.

spurious doubling due to NOAA station siting problems

dmacleo on July 29, 2012 at 5:47 PM

Where you see problems the warmists saw opportunities.

pedestrian on July 29, 2012 at 6:15 PM

Where, exactly, in Nebraska are these fragile ecosystems that these enviro-weenies purport will be decimated by the pipeline? And why couldn’t we live without the Nebraska Double Dicked Corn Fly or whatever the heck it is that these nut jobs are holding out to be more important than the livelihood of human beings?

natasha333 on July 29, 2012 at 6:32 PM

TransCanada should do what the Israelis do when they attack their enemies by air. Run the pipeline dead square on the border between two states so for example when Nebraska complains, say “the pipeline is in Wyoming”, and vice-versa.

slickwillie2001 on July 29, 2012 at 6:38 PM

Where, exactly, in Nebraska are these fragile ecosystems that these enviro-weenies purport will be decimated by the pipeline? And why couldn’t we live without the Nebraska Double Dicked Corn Fly or whatever the heck it is that these nut jobs are holding out to be more important than the livelihood of human beings?

natasha333 on July 29, 2012 at 6:32 PM

There’s not a single acre in the USA that Big Green can’t find a reason to declare ‘fragile’, sensitive, delicate, or pristine. In fact, the more worthless and barren it is, the more delicate you could argue it is. Even if it was totally barren and lifeless with no plants or animals, they would say that’s so rare that it must be preserved.

slickwillie2001 on July 29, 2012 at 6:41 PM

Lack of job creation because of a hostile regulatory environment? Surely not. It’s those d**n bankers sitting on cash instead of loaning it in the sub-prime market. The b****rds! Let’s confiscate their money! We’ll show them how a real, truly caring person spends money.

ss396 on July 29, 2012 at 6:41 PM

A lawsuit that gums up the XL works from the Sierra club, would be a very nice political gesture- for Super Mitt

FlaMurph on July 29, 2012 at 6:53 PM

I have said many times here, this will get signed mid-Sept, along with Stud Loan forgiveness and the Doobie Act 2012…throw in a war with Iran, and the Insufferable One cruises to victory…

hillsoftx on July 29, 2012 at 6:59 PM

EDIT: (Jazz) Thanks to our sharp eyed readers who noted that the American leg doesn’t actually start in Nebraska. However, the next court contested section referenced takes place there. Thanks.

Nice technique for keeping them on their toes. ; )

Bmore on July 29, 2012 at 7:09 PM

Even if it was totally barren and lifeless with no plants or animals, they would say that’s so rare that it must be preserved.

slickwillie2001 on July 29, 2012 at 6:41 PM

Bingo! These green wienies don’t oppose projects because a specific ecosystem contains some left-handed, purple-eyed, albino spotted lizard. They go digging through proposed development sites looking for some left-handed, purple-eyed albino spotted lizard in order to mount an opposition to proposed development. … and if they can’t find one, they make one up. Kind of like the spotted owl, who does just fine all on its own, or the desert owls here in AZ who are plentiful further south in the heart of the Sonoran desert, it just happens that the Arizona portion of the Sonoran desert is at the extreme northern end of the owl’s range, thus it is rare, not because of development, because the locale is not as favorable to it.

AZfederalist on July 29, 2012 at 7:11 PM

Suppose ecotards would give up retarding the process? They are retarded, that’s what they do.

BL@KBIRD on July 29, 2012 at 7:50 PM

Keystone XL moving forward… maybe

…seems to have lost it’s shine!
The media for SOME REASON has found shinier things to divert attention from the pivoting and focusing on jobs to where they always go …..elsewhere.
.
.
.
…it’s the ECONOMY stupid…!!!

KOOLAID2 on July 29, 2012 at 10:52 PM

TransCanada should do what the Israelis do when they attack their enemies by air. Run the pipeline dead square on the border between two states so for example when Nebraska complains, say “the pipeline is in Wyoming”, and vice-versa.

slickwillie2001 on July 29, 2012 at 6:38 PM

TransCanada did something similar to that with their first pipeline, which runs eastward in Canada from Alberta through Saskatchewan into Manitoba, then turns southward through extreme eastern North Dakota, South Dakota, and Nebraska. Of course, since these states’ eastern borders are rivers, the pipeline had to be run overland within each state’s territory.

The new proposed Keystone XL pipeline route is much more direct, southeastward from Alberta through eastern Montana, southwestern South Dakota, and northeastern Nebraska, which saves over 300 miles of pipeline length over the existing pipeline, and reduces pressure drop and pumping costs. If the pipeline route were deviated to avoid Nebraska, some of these advantages would be lost.

This northern leg of the pipeline is crucial to the success of the entire project. While the legs of the pipeline near Tulsa and Galveston can help to link the southern end to refineries, the entire pipeline won’t receive ANY oil until the northern leg is completed.

Steve Z on July 30, 2012 at 9:42 AM

Steve Z on July 30, 2012 at 9:42 AM

Why the constant calling it Galveston?

The terminus is Nederland on the Neches River, which is located just north of Port Arthur, TX. The largest refinery in the U.S. receives all of its imported crude oil through that terminal. This is one of the largest import terminals in the U.S. with 3 ship berths capable of Aframax sized tankers.

From there crude oil can be shipped across the Gulf Coast via pipeline.

Kermit on July 30, 2012 at 9:54 AM

This is a good business move since both Bakken and Canadian crude are bottlenecked at Cushing, OK. There are other pipelines bringing Canadian crude down to the Gulf Coast but not nearly in such a quantity.

There already is a one which is substantially larger at 1.2 million barrels per day which may be reversed from near Chicago down to St. James, LA. The refineries up there (IL, IN & OH) no longer need crude from the Gulf of Mexico and from the only supertanker port in the U.S. also located offshore Louisiana in the GoM.

The good news is that there is already enough refining capacity in TX and LA to take a few million barrels per day of Canadian crude without having to spend the billions of dollars necessary to refine 20 API crude. The Canadian blend is a mixture of produced very heavy crude (from wells) and Syncrude (from strip mined tar sands)

Kermit on July 30, 2012 at 10:07 AM

There are thousands of miles of pipeline like this already in the US.

This is more proof Republicans simply don’t know how to fight against an obvious and predictable enemy.

HopeHeFails on July 30, 2012 at 11:33 AM

Not mentioned in the article, and somewhat off-topic…

But the country has a major problem with all the new natural gas wells that have been drilled, and that are ready for production, but there are no pipelines to move that gas to customers.

I read least week that in Pennsylvania and close by, that 1000 wells have been capped and will remain capped until pipelines are constructed.

When Barack Obama talks about infrastructure, why doesn’t he ever mention pipelines?

J Baustian on July 30, 2012 at 11:33 AM

J Baustian on July 30, 2012 at 11:33 AM

While certainly more are needed, the problem is the glut of all that new natural gas and not enough market. We aren’t importing any except from Canada and that is because of production which provides areas without natural gas production.

The problem is economics of the shale gas drilling. Same goes for shale oil. It is more expensive than “conventional” drilling and completion.

Kermit on July 30, 2012 at 11:51 AM

The first is the Canadian leg leading from the oil sands fields in Alberta to the border crossing at Nebraska.(EDIT) This should have been a done deal by now, but the environmental groups are not going down without a fight. Lobbyists are already pressuring the government to expand the scope of the environmental review process significantly to “address indirect issues of climate change.” That language alone should be enough to tell you that if the government caves, it could drag on for decades of “research.”

By everything I have read, nothing will satisfy the econuts out in western Nebraska. They’ve already said as much.

catsandbooks on July 30, 2012 at 12:13 PM

The progress is in the form of the last permits being approved for at least one of the three major sections of the pipe.

This is Democrat fund raising, nothing more, nothing less.

The Democrats want companies to invest $10s of Billions into this, then, when it’s time for the final approvals the Democrats will demand huge campaign donations and support in the elections before they allow it to be completed.

RJL on July 30, 2012 at 3:38 PM