Reports related to this article:
Project(s): View 11 related projects in PECWeb
Plant(s): View 7 related plants in PECWeb
Released June 16, 2017 | SUGAR LAND
en
Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--The Nebraska Public Service Commission (NPSC) (Lincoln, Nebraska) is scheduled to hold a week of "intervenor hearings" in August on the proposed Keystone XL pipeline, and Nebraska regulators are expected to issue their decision on that project by mid-November, an executive with TransCanada Corporation (NYSE:TRP) (Calgary, Alberta), the project's developer, told an energy conference in Denver on June 13.
A positive vote in November could mean construction of KXL could begin next summer, predicted the TransCanada executive, who asked to remain anonymous.
Click on the image at right for a map of the proposed KXL pipeline.
The $8 billion Keystone XL (KXL) pipeline project has been stalled since late 2015, when then-President Obama denied it a presidential permit. But prior to that, the project had delayed for years by federal permitting disputes and lengthy environmental assessments. If constructed, it is designed to transport up to about 830,000 barrels per day (BBL/d) of crude oil about 1,179 miles, from Hardesty, Alberta, to Steele City, Nebraska, where it would intersect with other pipelines that could bring that crude to refineries in Patoka, Illinois, or the Texas Gulf Coast.
Most of the crude oil that KXL is projected to transport would be oil-sands crude extracted in Alberta, but there are provisions for KXL to transport up to about 100,000 BBL/d of crude oil from the Bakken Shale in North Dakota and Montana.
For more on KXL, see: January 31, 2017, article - Trump Orders Benefit KXL, DAPL and Other 'High Priority' Infrastructure Projects; January 25, 2017, article - Trump Backs Keystone, Dakota Access Pipelines with Directives, but Many Uncertainties Remain; November 11, 2016, article - Trump Election Raises Hopes for Keystone XL; and November 10, 2016, article - KXL Pipeline Permit Denial Caps a Week to Forget for TransCanada.
Early in his presidency, President Donald Trump issued a memorandum inviting TransCanada to resubmit its application for a presidential permit and instructing the U.S. Department of State to "take all actions necessary and appropriate to facilitate its expeditious review." Two months later, on March 24, the U.S. Department of State determined that importing crude oil from Canada via KXL was in the national interest and approved the presidential permit necessary to import crude oil from Canada via KXL. The pipeline is scheduled to cross Montana, South Dakota and Nebraska.
That State Department decision removed the last federal obstacle to constructing KXL. For the last few months, all eyes have been focused on the work of the five-member Nebraska PSC, which has jurisdiction over the routing of KXL in the Cornhusker State. Construction of the pipeline has been delayed pending a decision from the Nebraska regulators. TransCanada already has rerouted KXL to stay away from sensitive areas.
When speaking on June 13 to the Energy & Ag Summit, sponsored by the Ports-to-Plains Alliance (Lubbock, Texas), the TransCanada executive said the company was "pretty optimistic" about the regulatory process in Nebraska. "One commissioner is dead-set against us, but the other four appear to be open-minded, so I think we have a good chance with them." The project needs three "yes" votes from the NPSC before construction can begin.
But getting three "yes" votes will not be easy, he conceded, particularly on a controversial project like KXL: "The commissioners in Nebraska are elected, and elected officials respond to public pressures. The squeaky wheel gets the grease."
So far this year, the NPSC has held two public hearings on KXL, the executive said. In a marathon 12-hour hearing in May, 95 parties spoke against the pipeline and 37 spoke in support of it. A June hearing featured comments from 72 parties opposing KXL and 18 supporting it. The hearing in August is scheduled to last a week, he said.
"We're geared up and ready to go," he told conference attendees June 13. "Nebraska is the only thing that's holding us back."
If TransCanada gets a positive vote from the NPSC in November, the executive estimated the company could begin construction in seven to nine months, during the summer of 2018. Two years after that, in mid-2020, crude could begin to flow, he added.
The official criticized arguments made by organizations that want to prevent extraction of crude oil in Alberta: "The 'keep it in the ground' people don't want any fossil fuels used. Facts don't register with those folks. And that makes sense because they don't use any (facts) in their arguments."
If KXL is not built, the TransCanada official said that the crude oil from Alberta's oil sands will get to markets using railroad tankers. But he said that rail was a higher-cost and higher-risk transportation option compared with pipelines. The executive said firefighters in Omaha, Nebraska, told him that railcar tanker fires involving crude oil "are the worst, most dangerous thing we have to respond to."
The repeated delays in construction have driven up KXL's costs by "a lot," the TransCanada official said. "Steel pipelines we had already procured have to be maintained. If we are required to buy American-made steel pipe for the remainder of our requirements, it will cost more" than if TransCanada was allowed to source pipe without a buy-American mandate. Also, he said, the company has had to staff up and then slim down as the prospects for construction rose and fell. There have been "an enormous amount of layoffs" associated with KXL, the executive told conference attendees.
"So when we think about pipelines, we should remember that there's more to pipelines than oil and gas and steel," he concluded. "Pipelines mean jobs, and that affects the lives of families."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
A positive vote in November could mean construction of KXL could begin next summer, predicted the TransCanada executive, who asked to remain anonymous.
The $8 billion Keystone XL (KXL) pipeline project has been stalled since late 2015, when then-President Obama denied it a presidential permit. But prior to that, the project had delayed for years by federal permitting disputes and lengthy environmental assessments. If constructed, it is designed to transport up to about 830,000 barrels per day (BBL/d) of crude oil about 1,179 miles, from Hardesty, Alberta, to Steele City, Nebraska, where it would intersect with other pipelines that could bring that crude to refineries in Patoka, Illinois, or the Texas Gulf Coast.
Most of the crude oil that KXL is projected to transport would be oil-sands crude extracted in Alberta, but there are provisions for KXL to transport up to about 100,000 BBL/d of crude oil from the Bakken Shale in North Dakota and Montana.
For more on KXL, see: January 31, 2017, article - Trump Orders Benefit KXL, DAPL and Other 'High Priority' Infrastructure Projects; January 25, 2017, article - Trump Backs Keystone, Dakota Access Pipelines with Directives, but Many Uncertainties Remain; November 11, 2016, article - Trump Election Raises Hopes for Keystone XL; and November 10, 2016, article - KXL Pipeline Permit Denial Caps a Week to Forget for TransCanada.
Early in his presidency, President Donald Trump issued a memorandum inviting TransCanada to resubmit its application for a presidential permit and instructing the U.S. Department of State to "take all actions necessary and appropriate to facilitate its expeditious review." Two months later, on March 24, the U.S. Department of State determined that importing crude oil from Canada via KXL was in the national interest and approved the presidential permit necessary to import crude oil from Canada via KXL. The pipeline is scheduled to cross Montana, South Dakota and Nebraska.
That State Department decision removed the last federal obstacle to constructing KXL. For the last few months, all eyes have been focused on the work of the five-member Nebraska PSC, which has jurisdiction over the routing of KXL in the Cornhusker State. Construction of the pipeline has been delayed pending a decision from the Nebraska regulators. TransCanada already has rerouted KXL to stay away from sensitive areas.
When speaking on June 13 to the Energy & Ag Summit, sponsored by the Ports-to-Plains Alliance (Lubbock, Texas), the TransCanada executive said the company was "pretty optimistic" about the regulatory process in Nebraska. "One commissioner is dead-set against us, but the other four appear to be open-minded, so I think we have a good chance with them." The project needs three "yes" votes from the NPSC before construction can begin.
But getting three "yes" votes will not be easy, he conceded, particularly on a controversial project like KXL: "The commissioners in Nebraska are elected, and elected officials respond to public pressures. The squeaky wheel gets the grease."
So far this year, the NPSC has held two public hearings on KXL, the executive said. In a marathon 12-hour hearing in May, 95 parties spoke against the pipeline and 37 spoke in support of it. A June hearing featured comments from 72 parties opposing KXL and 18 supporting it. The hearing in August is scheduled to last a week, he said.
"We're geared up and ready to go," he told conference attendees June 13. "Nebraska is the only thing that's holding us back."
If TransCanada gets a positive vote from the NPSC in November, the executive estimated the company could begin construction in seven to nine months, during the summer of 2018. Two years after that, in mid-2020, crude could begin to flow, he added.
The official criticized arguments made by organizations that want to prevent extraction of crude oil in Alberta: "The 'keep it in the ground' people don't want any fossil fuels used. Facts don't register with those folks. And that makes sense because they don't use any (facts) in their arguments."
If KXL is not built, the TransCanada official said that the crude oil from Alberta's oil sands will get to markets using railroad tankers. But he said that rail was a higher-cost and higher-risk transportation option compared with pipelines. The executive said firefighters in Omaha, Nebraska, told him that railcar tanker fires involving crude oil "are the worst, most dangerous thing we have to respond to."
The repeated delays in construction have driven up KXL's costs by "a lot," the TransCanada official said. "Steel pipelines we had already procured have to be maintained. If we are required to buy American-made steel pipe for the remainder of our requirements, it will cost more" than if TransCanada was allowed to source pipe without a buy-American mandate. Also, he said, the company has had to staff up and then slim down as the prospects for construction rose and fell. There have been "an enormous amount of layoffs" associated with KXL, the executive told conference attendees.
"So when we think about pipelines, we should remember that there's more to pipelines than oil and gas and steel," he concluded. "Pipelines mean jobs, and that affects the lives of families."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
