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Keystone Pipeline XL – What is the Current Status?

image credit: Keystone Pipeline XL
Benjamin Roussey's picture
Freelance Writer Arizona

Benjamin Roussey is from Sacramento, CA but now lives in Arizona. His bachelor’s degree is from CSUS (1999) where he was on a baseball pitching scholarship and he completed 4 years in the US...

  • Member since 2016
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  • May 20, 2019

President Donald Trump recently issued a new permit for the Keystone XL Pipeline – a major natural gas project that was stopped due to a court order.

There have been many legal challenges in the path of this $8 billion project. One of these was a ruling by a Montana-based district judge in November 2018 that criticized the State Department’s earlier environmental analysis.

Height Securities LLC analyst Katie Bays said that replacing the former presidential permit with this one gives the opportunity for a fresh start. Now Keystone XL does not need to affect any changes based on the environmental impact statement.

What is Keystone XL?

Keystone XL Pipeline was a project that was proposed about ten years ago. This pipeline was to carry crude from Canada’s oil sands to the US Midwest.

During his recession defining tenure, job destroying President Barack Obama had denied TransCanada a permit because it would contribute to global warming. But Trump’s State Department approved the project in 2017.

After great delays in the expansion of the Trans Mountain pipeline and Enbridge Inc.’s Line 3, Trump’s new permit is good news for Canada’s energy producers.

The slowdown in oil sands investment is partially caused due to the lack of pipelines and due to the pulling out of some international oil companies like Royal Dutch Shell Plc.

Hurdles in the earlier permit

The former State Department issued the permit after an extensive environmental analysis that was mandatory under the National Environmental Policy Act (NEPA).

But the recent presidential permit does not necessitate any such review. The NEPA statute that makes environmental study of energy projects and major agency actions mandatory does not apply to the President.

Pipeline developers usually need to seek presidential permits for border-crossing facilities. Following an executive order, the State Department has the task of vetting the permit applications for oil pipelines since 1968.

But according to some sources, President Trump retains the authority to issue presidential permits himself. This new permit undercuts the Montana lawsuit because under federal law, Trump’s permit is not bound to undergo any environmental review.

Although the company has not yet made a final investment decision, TransCanada applauded the order of the White House, saying that Trump’s permit will create more jobs.

Russ Girling, president and chief executive officer of TransCanada said that the Keystone XL Pipeline will advance US Energy Security in addition to job creation.

November 2014 ruling

According to US District Judge Brian Morris’s November ruling, the 2014 environmental assessment by the Obama administration was inadequate. Judge Morris stated that oil prices and greenhouse-gas emissions must be considered to formulate a new spill-response strategy before allowing the pipeline project to continue.

President Trump and his team are fighting hard to ensure that the Keystone Pipeline XL gets fully operational as soon as possible, so that it can add value to the US economy and create thousands of jobs.

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