Abu Dhabi, UAEFriday 23 August 2019

Trump gives go-ahead to long delayed Keystone pipeline

It is the latest move in Trump administration's pursuit of 'energy dominance', or maximising production of oil, gas and coal for domestic use and export

President Trump signs permit for TransCanada 's Keystone XL oil pipeline. Reuters
President Trump signs permit for TransCanada 's Keystone XL oil pipeline. Reuters

US President Donald Trump signed a new permission for TransCanada to build the long-delayed Keystone pipeline to import Canadian oil, replacing his previous permits in a fresh attempt to get around the blocking of the $8 billion project by a court in Montana.

In granting the permission on Friday, Mr Trump revoked a previous permit for the pipeline issued in March 2017 and an executive order approving the project he issued two days after taking office in January that year, according to Reuters.

It was not immediately clear whether under the new approval the pipeline, which would carry 800,000 barrels per day of crude from Canada's oil sands to refineries along the US Gulf of Mexico, would have to undergo extensive new environmental reviews.

The Keystone XL pipeline has been pending for more than a decade after environmental reviews and after former President Barack Obama rejected the project saying it would do little to benefit US motorists and contribute to global warming.

Friday's permission was the latest move in the Trump administration's pursuit of what it calls "energy dominance", or maximising production of oil, gas and coal for domestic use and export to allies and trading partners. The administration has rolled back environmental regulations on emissions from power plants, and vehicles and opened up federal lands to drilling and mining.

Russ Girling, TransCanada's president and chief executive, said Mr Trump "has been clear that he wants to create jobs and advance US energy security and the Keystone XL pipeline does both of those things".

The pipeline faced numerous legal hurdles after several environmental groups sued the US government over the 2017 presidential permit, and Keystone has been held up in the courts, most recently in Montana.

Judge Brian Morris of the US District Court for Montana blocked construction of the pipeline in November last year.

Mr Morris wrote in his ruling that a US state department environmental analysis “fell short of a "hard look" at the cumulative effects of greenhouse gas emissions and the impact on Native American land resources.

Mr Trump's move could pave the way for beginning some preliminary work, according to Clearview Energy Partners.

“It looks like the intent is to wipe the slate clean and replace the previous presidential permit with this new one,” Height Securities analyst Katie Bays said. Keystone XL does not need the changes to the supplemental environmental impact statement “because Trump invalidated that whole process and issued this new president permit.”

It is good news for Canada’s energy producers, reported Bloomberg, after delays to planned expansions of the Trans Mountain pipeline and Enbridge’s Line 3. The lack of pipelines is partially blamed for a slowdown in oil sands investment and the partial pullback of some international oil companies including Royal Dutch Shell.

Updated: March 30, 2019 02:23 PM

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