By BEN LEFEBVRE
TransCanada Corp. said it reached a tentative deal with
Nebraska officials that would move the planned route of its
Keystone XL pipeline project away from an environmentally
sensitive region, possibly reviving a stalled approval process
for the controversial oil conduit.
The Calgary-based energy company will support a bill
introduced in the State legislature Monday that will seek a new
route avoiding the Sandhills, a region of sandy soil that sits
atop the Ogallala aquifer, one of the world's largest.
"I can confirm the route will be changed and Nebraskans will
play an important role in determining the final route," Alex
Pourbaix, TransCanada's president for Energy and Oil Pipelines,
said in a statement.
TransCanada's move is a rapid response to the US State
Department's decision last Thursday to delay its final decision
of the cross-border pipeline for up to 18 months because of
concerns about its environmental impact.
Approval for the expansion, which would more than
double the amount of heavy Canadian crude TransCanada ships
from Alberta's booming oilsands to the heart of the US refining industry in Texas, was
expected to be given by the end of this year.
The delay was a victory for environmentalists who maintain that
oilsands crude contributes more to global warming than other
types of oil, but it irked the pipeline's supporters in the
Canadian government and in the North American energy
Companies such as Exxon Mobil Corp., Valero Energy Corp. and
ConocoPhillips have spent billions of dollars either growing
oil production in Alberta's oilsands, or refurbishing their
refineries to handle heavy crude.
If the expansion is completed, the Keystone
pipeline system would bring about 1.1 million bpd of crude to
the US. Without the key oil conduit, oil producers in
land-locked Alberta would face a glut that might result in
depressed prices for their crude, and US refiners would have to
keep sourcing most of their heavy crude from overseas.
Canadian oil production is expected to reach 4.7 million bpd
by 2025, up from 2.8 million bpd in 2010, according to the
Canadian Association of Petroleum Producers. Due to its thirst
for energy and proximity, the US is a key market for that oil,
but Canadian officials, ruffled by the State Department's
decision, have said the country's producers could be forced to
look for other outlets.
"This does underscore the necessity of Canada making sure
that we are able to access Asia markets for our energy
products," Canadian Prime Minister Stephen Harper told
reporters during a press conference in Hawaii.
The agreement between TransCanada and the Nebraska officials
would have the Nebraska government pay for the supplemental
environmental impact statement required for the re-route, said
Matt Boever, spokesman for Nebraska state senate speaker Mike
Flood. The bill of which the agreement is part could come up
for a vote as soon as Wednesday, Boever added.
TransCanada executives have said that reaching an agreement
with the Nebraska state government could greatly speed up the
time needed to win final approval of the project.
"This might take six months, not 18 months," TransCanada's
general counsel Sean McMaster said in an interview last
TransCanada spokesman James Miller said that the company
hopes the agreement "will speed up the approval process."
The agreement may not be enough to greatly accelerate the
State Department's review, however. Compiling a new environmental impact statement could
still take more than a year, said a State Department official
familiar with the process.
"Based on prior projects similar in scope, we expect
it will take 12-18 months to complete," the official
Dow Jones Newswires