Trump Administration Grants Permit to TransCanada for Keystone Pipeline -- Update
March 24 2017 - 09:58AM
Dow Jones News
By Christopher M. Matthews and Anne Steele
The Trump administration has given final approval to the
Keystone XL project, bringing the mammoth oil pipeline a step
closer to fruition more than a year after former President Barack
Obama blocked its construction.
The U.S. State Department said Friday it had issued a
presidential permit to TransCanada Corp., the company behind the
Keystone XL, to build the pipeline.
It still faces state-level legal challenges in Nebraska and
South Dakota that could cause further delays. TransCanada needed
approval from the State Department because the pipeline crosses the
U.S.-Canadian border.
"This is a significant milestone for the Keystone XL project,"
said TransCanada Chief Executive Russ Girling.
If completed as planned, Keystone would send up to 830,000
barrels of oil a day, mostly from Canada's oil sands, to Steele
City, Neb., where it would link to existing pipelines to Gulf Coast
refineries.
The pipeline has become a flashpoint over the debate on fossil
fuels and the approval, while expected, reflects President Donald
Trump's broader directives to ease regulations on infrastructure
projects. Secretary of State Rex Tillerson, the former chief
executive of Exxon Mobil Corp., had earlier recused himself from
the issue.
Environmentalists have urged rejection of the pipelines as part
of a commitment to fighting climate change, and were quick to
condemn the permit Friday.
"The Trump administration may be furiously propping up an
obsolete energy system at the behest of his fossil fuel cronies,
but the majority of people in this country want action on climate
change and want support for renewable energy," Greenpeace USA
Executive Director Annie Leonard said Friday.
Fossil-fuel companies have argued the projects are essential for
energy security and the economy, and industry groups praised the
move.
"We applaud President Trump's decision to approve the project
and prove to the world that America is capable of tackling the
major infrastructure improvements necessary for a modern economy,"
said Thomas J. Donohue, president and CEO of the U.S. Chamber of
Commerce.
Debate over the project is unlikely to abate. Environmental
activists have increasingly targeted pipeline projects like
Keystone and the Dakota Access Pipeline with protests. Furor over
the project in Nebraska, where state approval is still needed,
derailed the project initially.
"While Presidential approval is a major step forward for the
pipeline, the battle is far from over as the company still needs to
secure some of the land rights with landowners, still needs a
permit in Nebraska and is expected to be met with protester
opposition," Tudor, Pickering, Holt & Co., an energy investment
bank, said in a note to investors.
TransCanada said Friday it will continue to engage key
stakeholders and neighbors along the pipeline's planned route
throughout Nebraska, Montana and South Dakota to obtain the
necessary permits and approvals.
While oil and gas companies have welcomed Mr. Trump's support of
energy infrastructure projects, his assertion that such projects
must use U.S. steel has confounded them.
Mr. Trump's executive order approving two pipeline projects in
January also mandated the use of American-made steel, a requirement
Mr. Trump has reiterated in the months following. But in March, an
administration official said the order won't apply to the
construction of Keystone but only to new pipelines.
Steel analysts have long doubted that the president's executive
order would require the use of U.S.-made steel in the Keystone
project, because the pipe for the project has already been
purchased. Additionally, it is questionable whether U.S. producers
can make the necessary grade of steel for the 36-inch diameter pipe
for the project.
In a statement, a spokesman for Canada's Resources Minister Jim
Carr said the federal government was encouraged by the Trump
administration's decision. "Nothing is more essential to the
American economy than access to a secure and reliable source of
energy. Canada is that source. This pipeline underscores that," the
spokesman said.
Paul Vieira contributed to this article.
Write to Christopher M. Matthews at christopher.matthews@wsj.com
and Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
March 24, 2017 10:43 ET (14:43 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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