TransCanada, the company that developed the Keystone XL pipeline, has reapplied for a permit to allow the pipeline to cross the U.S. border. This move follows closely on the decision by President Trump to sign an executive order inviting the company to reapply. From the Globe and Mail:
“This privately funded infrastructure project will help meet America’s growing energy needs as well as create tens of thousands of well-paying jobs and generate substantial economic benefit throughout the U.S. and Canada,” Russ Girling, TransCanada’s president and chief executive said in a news release announcing the application late Thursday.
President Obama announced in 2013 that he would only greenlight the pipeline if it would not “exacerbate the problem of carbon pollution.” In November 2015, Obama announced the State Department had killed the project by refusing to grant the cross-border permit. “America is now a global leader when it comes to taking serious action to fight climate change. And frankly, approving this project would have undercut that global leadership,” Obama said.
Politics aside, there is some question about whether the pipeline is still economically viable. When it was proposed back in 2008, oil was over $100 a barrel. That made extracting oil from Canada’s tar sands a worthwhile project. Now that oil is selling for about half that, TransCanada needs to talk with shippers. From Reuters:
[TransCanada CEO] Girling said he believes the project remains attractive for shippers, given that it will supply the popular Gulf Coast market.
“But we haven’t engaged in direct conversation on that issue,” he said at an investors conference. “This wasn’t in our planning horizon in the middle of last year, so we’ve only just re-engaged with our shippers again.”
For the moment, TransCanada is highlighting the immediate benefits to the economy of constructing the pipeline. A company press release states, “KXL will benefit American workers, their families and the communities they live in as well as the U.S. economy. During construction, in Nebraska, South Dakota and Montana alone, KXL will generate hundreds of millions of dollars in employee earnings as well as tens of millions of dollars annually in local tax revenues providing much needed funds for community schools, hospitals, first responders and roads.”