TransCanada Corp. (TRP)’s proposed Keystone XL oil pipeline would benefit U.S. employment and support efforts to tackle climate change, according to the company’s Chief Executive Officer Russ Girling.
“The opponents to this project have indicated that this is a choice somehow between environment and jobs,” Girling said in an interview with Bloomberg Television’s Peter Cook for “Capitol Gains” airing June 2. “That’s simply not true.” Keystone XL would ensure North American energy security, and denying it would lower employment and increase emissions as the U.S. imports more crude in tankers that run on oil, he said.
The U.S. State Department this month posted some of the more than 1.2 million public comments it received on its draft environmental study of the $5.3 billion Keystone XL, proposed by Calgary-based TransCanada to ship crude from Alberta’s oil sands to the U.S. Gulf Coast. Comments from some opponents suggesting the oil sands are the planet’s most carbon-intensive fossil fuels are “factually incorrect,” Girling said.
A rejection of Keystone would reduce spending on oil-sands projects that need new pipeline capacity to reach markets by C$9.4 billion ($9.13 billion) from 2014 to 2017, Dan MacDonald, a Calgary-based analyst at RBC Capital Markets, said in a May 27 note to clients.
Keystone XL, which requires approval from U.S. President Barack Obama because it crosses an international border, would transport about 830,000 barrels a day of crude, crossing six U.S. states.
Obama initially denied a permit for the line in January 2012, citing concerns it might threaten the ecologically sensitive Sand Hills region in Nebraska. TransCanada resubmitted its plan a year ago with a new route from the Canadian border to connect to an existing line in Steele City, Nebraska.
“Reject Keystone XL to put the U.S. on the right track to climate recovery,” the National Wildlife Federation Action Fund said in a letter on the State Department’s website, arguing the line would pose spill risks and enable oil-sands projects that threaten the climate, forests and wildlife.
While the draft State Department review makes no recommendation about building Keystone XL, it found that the conduit doesn’t pose significant environmental risk because oil-sands development would continue without the line. TransCanada expects a U.S. decision by “mid-summer,” Girling said.
Canada is moving to limit greenhouse gas emissions in the oil sands with new legislation and has already lowered climate-warming gases, in part with an existing carbon tax in Alberta, Girling said. Figures from the federal government show oil-sands emissions amount to “1/10th of one percent of global GHGs, so hardly a major carbon issue,” he said.
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