TransCanada is asking the courts if it can continue preliminary construction work on the stalled Keystone XL pipeline.
On November 8, US District Judge Brian Morris in Montana halted the pipeline, saying that the government of President Donald Trump did not fully analyse its potential environmental impact when it green-lighted the project. Keystone XL will carry crude from Canada’s oil sands – and a lesser amount from North Dakota – to Steele City, Nebraska, from where the oil would be shipped south to refineries on the Gulf Coast.
Construction had been expected to start in mid-February 2019, but could now be delayed by up to a year.
TransCanada has asked Morris to allow it to proceed with, for example, purchasing materials, conducting land surveys and seeking final federal permits. It would not start construction before the second half of the first quarter of 2019, a TransCanada spokesman told Reuters.
“A one-year delay in construction of the pipeline would result in substantial harm to TransCanada, as well as to United States workers, and to TransCanada’s customers relying on the current in-service date of the project,” a TransCanada Pipelines senior vice president, Norrie Ramsay, said in a written statement to the district court.
A year-long delay would cost TransCanada US$949 million in earnings and delay the hiring of about 6,600 construction workers, he continued. TransCanada has said it is considering whether to appeal against the judge’s order.
The US$8 billion Keystone XL project will have a capacity of 830,000 bpd and was previously anticipated to be in service in 2021, a date that could now be delayed.
In his ruling, Morris had said that he was rescinding the construction permit because the US Department of State (DoS) had not adequately addressed the issue of climate change. Concerns over this have arisen because new takeaway capacity from the oil sands is expected to boost both production and greenhouse gas (GHG) emissions. The DoS’ analysis of the project last year “fell short of a ‘hard look’”, he said. Morris also said that the analysis did not properly review the possible impacts of oil spills or lower crude prices.