TransCanada's Oil-Sands Pipeline Would Create 12,000 Jobs, Girling Says

TransCanada Corp.’s 2,000-mile pipeline linking Alberta’s oil sands with Gulf Coast refiners may add at least 12,000 jobs and provide a stable fuel source for the U.S., Chief Executive Officer Russell Girling said.

Efforts to stop the $7 billion Keystone XL project because lawmakers say developing tar sands may release more greenhouse gases than other types of oil production will result in the crude being redirected from the U.S., Girling said.

“Permitting our pipeline will not impact the development of oil sands,” Girling said today in a telephone interview. “The oil sands will be developed in any event.”

TransCanada’s proposal has been faulted by U.S. lawmakers such as Henry Waxman, chairman of the House Energy Committee, and questioned by the U.S. Environmental Protection Agency. Without Alberta’s oil, the U.S. will need more crude from countries less friendly to its interests than Canada, Girling said. Canada is now the biggest U.S. source of imported oil.

Cynthia Giles, an EPA assistant administrator, wrote in a July 16 letter that the State Department failed to adequately review the project’s potential impact on the environment. A final decision by the State Department, which has jurisdiction over international energy projects, may come early next year.

Waxman, a California Democrat, in a July 2 letter, called the pipeline a “multibillion investment to expand our reliance on the dirtiest source of transportation fuel currently available.”

Susan Casey-Lefkowitz, the director for international policy at the Natural Resources Defense Council in New York, said the U.S. should reject the pipeline because it would import a particularly dirty type of oil and poses risks to sensitive habitats and water resources from spills.

‘Enough Tar Sands’

“We have enough tar-sands oil coming in right now,” she said.

Girling, who replaced Hal Kvisle as president and CEO of TransCanada in July, said the State Department assessment was sufficient and he disputed conclusions that tar sands oil creates more carbon pollution than other oil production. He said pipelines are the safest way to transport oil.

Keystone XL would create 12,000 to 13,000 jobs during two years of building, he said.

“We would hope those folks that are in the capacity of approving these permits would recognize those economic and jobs benefits,” Girling said. The political disagreement “has the potential” to delay the project.

The pipeline will have a capacity to carry 500,000 barrels of oil a day. TransCanada has “firm, 20-year contracts” for 380,000 barrels, he said.

Upgrades would increase capacity to 900,000 barrels, which would roughly double U.S. imports of tar-sands fuel.

Bakken Oil

The pipeline would run from Alberta through Montana, South Dakota and Nebraska and merge with an existing line in Kansas en route to Texas and the Gulf.

TransCanada agreed to carry oil from the Bakken oil field in North Dakota and Montana. Girling said as much as 100,000 barrels a day from the area may be transported by Keystone XL.

Senator Max Baucus, a Montana Democrat and chairman of the Senate Finance Committee, is urging the State Department to expedite approval of the permit.

TransCanada also negotiated terms with six labor unions for wages and benefits for pipeline construction work.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.