TransCanada pushes forward on Keystone XL - for now

TransCanada plans to build the Keystone XL pipeline according to an alternative route. | Jeff McIntosh  The Canadian Press via AP

TransCanada plans to build the Keystone XL pipeline according to an alternative route. | Jeff McIntosh The Canadian Press via AP

On Thursday, TransCanada announced that it had obtained 20-year commitments to ship 500,000 barrels of crude oil a day through the controversial pipeline, "positioning the proposed project to proceed".

TransCanada's statement comes two months after the Nebraska Public Service Commission approved a 280-mile pipeline route across the state following years of opposition that gained national and global support.

The approved route was based on a comprehensive review of the evidence submitted by all parties in the hearing process as well as state agencies to ensure it has a minimal impact to the public and to Nebraska's natural resources.

Late past year, in a conference call with investors, TransCanada Chief Executive Russ Girling said the company needed to secure commitments to transport 500,000 barrels of oil a day to start construction.

Meanwhile, the company had said it would decide in December whether the 36-inch pipeline was financially feasible. The pipeline operator will continue to secure additional volumes.

The commitment is half of the 100,000 barrels per day that Alberta had committed to TransCanada's proposed Energy East pipeline, which was shut down by the company a year ago.

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The company said it is conducting outreach to communities and landowners on the new alternative route across Nebraska.

The Nebraska commission's vote to approve a route through the state removed one of the last regulatory obstacles for the project. Opponents have filed a lawsuit challenging the commission's decision.

"TransCanada's announcement today is nothing more than an attempt to distract from the fact that they still face significant headwinds towards ever making their Keystone XL pipe dreams a reality", said Kelly Martin, director of the Sierra Club's Beyond Dirty Fuels campaign. Business groups and some unions support the project as a way to create jobs and reduce the risk of shipping oil by trains that can derail.

The limits on oil export capacity has exacerbated the discount that Canadian oil producers are forced to accept for their crude relative to West Texas Intermediate, which also hurts the royalty payments Alberta's government collects from the industry.

The Keystone extension will be connected to an existing pipeline network in the US, allowing for 830,000 barrels of oil to be transported from landlocked Alberta, Canada to US Gulf Coast refineries.

President Barack Obama's administration studied the project for years before finally rejecting it in 2015 because of concerns about carbon pollution.

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