By LISA LERER and JIM SNYDER
TransCanada CEO Russ Girling acknowledged that opponents of
the Keystone XL pipeline have slowed its approval, though he
said his company remains committed to the project.
Theres no question that the noise outside is having
an influence on the process, he said this week, in an
interview in Washington. The project has been hijacked by
activists that are opposed to the development of all fossil
Girling, who recently met with State Department officials about
the project, expressed frustration with the five-year review by
US regulators, saying the process for evaluating cross-border
energy projects must change. He said he has stopped giving the
companys investors an estimate of when the approval
process will be complete.
I think we have exhausted everything that could possibly
be asked, he said.
Still, he said TransCanada, which is based in Calgary, would
continue pushing to build the $5.3 billion link between
Albertas oil sands and refineries along the Gulf Coast,
even if President Barack Obama eventually decides against
approving the route. He did not elaborate on what steps the
company would take if the project is rejected.
Nobody is going to pack up their tent and leave, he
said. We will get through these hurdles. The marketplace
will determine whether these projects get done.
Obama made his last public comments about Keystone in June,
saying he would approve the remaining portion of the pipeline
only if it would not significantly exacerbate the problem
of carbon pollution.
Many environmentalists, including some of
the presidents biggest financial donors, have turned the
project into a litmus test on environmental issues. The decision,
they argue, will set the parameters of the energy debate for
years to come and determine Obamas legacy on climate
Even so, Girling said he viewed the presidents comments
as positive, saying that the pipeline would not
increase oil consumption and would displace carbon-intensive heavy crude from
Venezuela or elsewhere.
The pipeline itself has no emissions and theres no way
that building it will cause an increase in consumption,
Keystone critics have been very successful in creating
the impression that the pipeline equals emissions, which is what this is all
about, Girling said. He likened the argument to
suggesting that if we stop building roads people will
stop driving. They will just drive on bad roads.
Opponents argue that the pipeline would increase carbon emissions by accelerating the
pace of oil sands development, which releases more greenhouse
gas emissions than the production and refining of more conventional types
Tar sands are the dirtiest fuel source of oil, and
Girling knows that investors will flock to Alberta if Keystone
is approved, said Daniel Kessler, a spokesman for
350.org, an environmental group that has led
much of the opposition to the line. So its not just
about this pipeline but instead a larger signal that the tar
sands are open for business if Keystone is
Previous pipelines built by the company took about two years to
be approved by US authorities. The longer regulators delay a
decision on Keystone, said Girling, the more costs mount for
$2 billion already invested
The company has $2 billion invested in the project already, he said. Unused
pumps sitting in warehouses and pipes laying on the ground need
to be maintained and labor agreements and construction contracts are coming
due for renegotiation.
We have a very expensive and complicated process of
trying to manage a construction project that should
have finished by now, he said. Its the whole
value chain thats involved.
The lower leg of the line from Cushing, Oklahoma, to the Gulf
Coast, which TransCanada started building earlier because it
didnt require a presidential permit, is 85% complete and
on track to start transporting crude at the end of this year,
the company said. A lateral pipeline to Houston is forecast to
be online in 2014.
Harold Hamm, the CEO of Continental Resources, has said the
northern leg of Keystone thats now under review is no
longer needed with rail making up for a lack of pipelines to
carry oil from the Bakken Field in North Dakota to markets to
the east, west and south.
Canadian oil producers should focus on exporting the bitumen
to Asia and elsewhere as domestic producers negate the need for
oil in the US, Hamm said at a Bloomberg energy conference in
Houston earlier this month.
The Oklahoma City-based Continental is the biggest owner of
drilling leases in the Bakken, and competes with Canadas
oil sands producers among US refiners.
Keystone would have the capacity to deliver 830,000 bpd of
crude, including 100,000 bbl reserved for US producers. Girling
said oil companies operating in the US remain committed to the
project, including Continental.
We havent had any of our shippers drop their
contracts on our project, Girling said. In fact, we
have folks that still want to get on the pipeline. What you are
hearing from producers is we have to get on with our
Girling said there wasnt anything of material
significance discussed during his meeting with State
Department. The agency has jurisdiction because the project would cross an international
The company would try to address any concerns that may arise,
including safety improvements to reduce the risks of spills, he
We have no issue with adding additional features that
would allow us to be as safe as we possibly can, he said.
That is our primary objective.