Trump greenlights Keystone XL pipeline, but obstacles loom

26 Mar, 2017 11:09 am
WASHINGTON/CALGARY, ALBERTA – U.S. President Donald Trump’s administration approved TransCanada Corp’s (TRP.TO) Keystone XL pipeline on Friday, cheering the oil industry and angering environmentalists even as further hurdles for the controversial project loom.
 

The approval reverses a decision by former President Barack Obama to reject the project, but the company still needs to win financing, acquire local permits, and fend off likely legal challenges for the pipeline to be built.

“TransCanada will finally be allowed to complete this long-overdue project with efficiency and with speed,” Trump said in the Oval Office before turning to ask TransCanada Chief Executive Officer Russell Girling when construction would start.

“We’ve got some work to do in Nebraska to get our permits there,” Girling replied.

“Nebraska?” Trump said. “I’ll call Nebraska.”

Trump announced the presidential permit for Keystone XL at the White House with Girling and Sean McGarvey, president of North America’s Building Trades Unions, standing nearby. He said the project would lower consumer fuel prices, create jobs and reduce U.S. dependence on foreign oil.

The pipeline linking Canadian oil sands to U.S. refiners had been blocked by Obama, who said it would do nothing to reduce fuel prices for U.S. motorists and would contribute to emissions linked to global warming.

Trump, however, campaigned on a promise to approve it, and he signed an executive order soon after taking office in January to advance the project.

TransCanada’s U.S.-listed shares (TRP.N) dipped 5 cents to close at $46.21 on Friday.

JOBS

Trump has claimed the project would create 28,000 jobs in the United States. But a 2014 State Department study predicted just 3,900 construction jobs and 35 permanent jobs.

The president said he would get in touch with Nebraska Governor Pete Ricketts later in the day.


TransCanada applied to the Nebraska Public Service Commission in February for approval of the pipeline’s route through the state. The company said it expects that process to conclude this year.

Ricketts said in a statement posted on Twitter that the project would help his state.

“I have full confidence that the Public Service Commission will conduct a thorough and fair review of the application,” he said.

The White House has said the pipeline is exempt from a Trump executive order requiring new pipelines to be made from U.S. steel, because much of the pipe for the project has already been built and stockpiled.

“As we move forward, we’ll continue to look to buy the rest of the materials we need from … American manufacturers. We’ll put American workers to work,” Girling told reporters.

Environmental groups vowed to fight it.

Greenpeace said it would pressure banks to withhold financing for the multibillion-dollar project, and others said they would fight the pipeline in court.

“We’ll use every tool in the kit,” said Rhea Suh, president of the Natural Resources Defense Council.

Since Obama had nixed the pipeline based on an environmental assessment commissioned by the State Department in early 2014, opponents will likely argue in court that Trump cannot reverse the decision without conducting a new assessment. –Reuters




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