TransCanada Corporation (NYSE:TRP) (TSE:TRP) CEO Russ Girling has said that starting operation of its Keystone XL project will be difficult due to the length of the U.S. approval process, reports Rebecca Penty of Bloomberg.
TransCanada CEO’s expectations
Girling said that he expected to receive a final environmental impact assessment from the U.S. State Department in the coming weeks, but that there would still be a 90 day waiting period before the project could receive approval. The process is being managed by the State Department because the pipeline crosses an international border, but eight agencies will have input on whether or not the project goes forward. The last set of plans were rejected by President Obama ahead of a congressional deadline due to their ecological impact in Nebraska, a problem the company hopes it has solved by routing the pipeline through a different part of the state.
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Political wrangling continued in May when House Republicans supported a bill that would have allowed them to grant approval without going to the president, though the bill has little chance of actually becoming law.
If the Keystone XL’s new route is approved construction on the $5.3 billion pipeline will take a full two years. While a 2015 start date isn’t out of the question, it hinges on there being no other setbacks during the approval and construction of the pipeline. The Keystone XL, an extension to the existing Keystone pipeline, was first proposed in 2008.
Continuing opposition to new pipeline route
Regardless of where the pipeline is built, environmental groups oppose construction of the Keystone XL because of the risks of oil spills and because of their opposition to the Alberta oil-sands project, which produces more greenhouse gas than other methods of crude oil production.
TransCanada CEO says opposition to the pipeline is symbolic
Girling says that opposition to the pipeline as a proxy for the oil-sands project is merely symbolic, because the oil-sands are going to be developed either way. “Keystone is not the driver of whether Canadian oil sands will be produced,” he said. “They will be produced either way.”
The Keystone XL would bring crude from the oil sands down to refineries along the U.S. Gulf Coast. It’s not clear where the crude would be shipped instead if the pipeline project were rejected again.
TransCanada Corporation (NYSE:TRP) (TSE:TRP) has said that it will not update its estimates for the cost or the timeline of the project until it has received U.S. approval.