TransCanada Corp. (Toronto: TRP.TO) welcomed the U.S. Department of State's (DOS) release of the Draft Supplemental Environmental Impact Statement (DSEIS) on Keystone XL. The company remains strongly committed to obtaining approval to safely build and operate the pipeline, and will continue to be engaged in the process as the DOS enters its final stages of reviewing the project.
While TransCanada is still reviewing the DSEIS, it builds on more than 10,000 pages of review already completed for Keystone XL. The DSEIS reaffirmed that "there would be no significant impacts to most resources along the proposed project route." It noted that Keystone XL would result in no "substantive change in global GHG emissions" and it is "unlikely to have a substantial impact on the rate of development in the oil sands, or on the amount of heavy crude oil refined in the Gulf Coast area." Finally, it also noted that "the denial of a Presidential Permit would likely result in actions by other firms in the United States (and global) petroleum market, such as use of alternative modes to transport WCSB and Bakken crude."
The August 2011 Final Environmental Impact Statement (FEIS) further notes that TransCanada has also agreed to adopt 57 special safety measures for the pipeline developed by the U.S. federal pipeline safety regulator (PHMSA), which the FEIS said would give the pipeline "a degree of safety over any other typically constructed domestic oil pipeline system under current code." The 57 conditions include burying the pipe a minimum of four feet below the surface, increased pipeline inspections and a greater number of remote-controlled valves that can shut down the pipeline within minutes.
Throughout 2012, TransCanada completed the process established by the State of Nebraska and Nebraska's Department of Environmental Quality to develop a revised route through Nebraska that avoids the Sandhills area and minimizes potential impacts on other environmentally-sensitive features in the state. The revised route was approved in January 2013 by Gov. Dave Heineman.
TransCanada's existing Keystone Pipeline has safely and reliably delivered more than 389 million barrels of crude oil from Canada to refinery markets in the U.S. Midwest since it began operation in July 2010.
Keystone XL will directly employ 9,000 people during two years of construction. Once complete, it will generate millions of dollars in tax revenues for local communities along the pipeline route and will transport up to 830,000 barrels per day of Canadian and American crude oil that can replace higher-priced oil imported from countries like Venezuela, Saudi Arabia, Nigeria, and Iraq. In addition, TransCanada began construction on the 780-kilometer (485-mile) Gulf Coast Pipeline Project from Cushing, Okla. to Nederland, Texas in August. That $2.3-billion project is more than half complete and has directly employed 4,000 skilled American workers.
Combined, Keystone XL and the Gulf Coast Pipeline projects will invest about $7.6 billion in the United States, directly support 20,000 construction and manufacturing jobs and enhance America's energy security by supplying refineries in the U.S. Midwest and Gulf Coast refining hubs with Canadian and American oil to displace crude from other countries and regions.
"The latest forecasts from the International Energy Agency and the U.S. Energy Information Agency indicate that the United States will continue to import 3.5 million to 7 million barrels of oil a day to meet its domestic needs until 2035 and beyond," said Russ Girling, TransCanada's president and chief executive officer. "It makes sense for this oil to come from a stable, democratic neighbor such as Canada that shares common values and an integrated economy with the United States."
Oil sands production accounts for about one-tenth of one percent of global greenhouse gas emissions. Additionally, the environmental performance associated with oil sands production continues to improve and producers have reduced per barrel emissions by 26% since 1990. Canada's greenhouse gas emission reduction targets are aligned with the United States and the Canadian federal government has committed to phasing out all coal-fired power facilities if they are unable to meet new regulations and standards. Alberta, where the oil sands are located, was the first jurisdiction in North America to introduce a carbon tax on industrial emitters, and the provincial government has already collected $312 million to fund environmental research that is focused on reducing impacts associated with greenhouse gas emissions.
The transactions will generate more than $500 million toward improving Chesapeake's balance sheet.
The region has become one of the most depending in the nation on foreign oil as the West lacks pipeline access to crude from shale supplies in the middle of the country.