Reports that the Keystone XL pipeline may be dead on arrival are “untrue,” according to a spokesman for TransCanada, the planned pipeline’s builder.
“Recent media coverage has suggested that TransCanada is backing away from the Keystone XL project due to a lack of commercial support. This simply is not true,” TransCanada wrote in a statement following their second quarter earnings call.
Media outlets from Politico to HuffPost touted the possible imminent demise of the Keystone XL project. “[T]he nearly decade-long Keystone saga may end in failure,” wrote Politico.
Matthew John, a spokesman for TransCanada, confirmed to Western Wire via email TransCanada’s support among customers and their commitment to the project.
“[T]he idea that there is a lack of commercial support for this project is simply untrue,” John wrote. “We are committed to Keystone XL and we have good support from our core customers. What we’re aiming for in this open season is to secure a significant number of long-term 20-year contracts and we are very confident in our ability to do so.”
John said the implication that the company had been shaky in its outlook on Keystone XL was not accurate, and that the commercial demand for the pipeline remained.
“We’ve been consistent since we began this process back in January, that we have had good support from customers and we are making progress in our discussions,” wrote John. “The fundamental need for Keystone XL: the demand for heavy crude oil in the Gulf Coast has not changed. The USGC [U.S. Gulf Coast] remains the most attractive market for heavy oil, and Keystone XL remains the safest and most efficient way to supply that market.”
The CEOs of Canadian oil producers Cenovus Energy, Inc. and Suncor Energy Inc. gave Keystone XL their votes of confidence this week, saying that pipeline capacity demand persists. Suncor will ship its products using Keystone XL, confirming the news to the Calgary Herald.
Canadian Natural Resources CEO Steve Laut told CBCNews Calgary his company will use approximately one fifth of Keystone XL’s 830,000-barrel-per-day capacity to send Alberta crude to the U.S. Gulf Coast refineries.
“It makes economic sense to support Keystone and we support Keystone. We’re in for 150,000 barrels per day,” Laut said.
And while the company still awaits a decision from the state of Nebraska that is due by November, TransCanada’s efforts will continue towards that goal.
“With respect to our plan, Keystone XL needs to have an approved route through Nebraska and securing that approval is our focus,” John wrote.
“We also believe the Keystone XL is the safest, most efficient and more environmentally sound way to move that crude oil from Western Canada to the U.S. Gulf Coast,” Russ Girling, TransCanada President and CEO, confirmed during the earnings call. Girling said the project would improve U.S. energy security, in addition to creating jobs.
“I think it’s up to us as industry and the governments, municipalities, everyone, to work together to make sure all the issues are addressed and it gets put through,” Laut told CBCNews after TransCanada’s second-quarter announcement.
Keystone’s critics like Jeffrey D. Sachs, University Professor and director of the Center for Sustainable Development at Columbia University, said projects like TransCanada’s pipeline “look unlikely to rise from the dead,” citing a lack of current and future markets for the Alberta oil sands.
However, a June forecast from the Canadian Association of Petroleum Producers estimated Canadian production equal to a pipeline capacity of four million barrels per day, and expected rail shipments of crude were “expected to grow” as new projects come on line.
Canada’s largest competitor, Venezuela, could face a U.S. ban on oil imports as a result of the country’s recent political turmoil, giving Canadian heavy oil a further boost, according to Financial Post. U.S oil refineries on the Gulf Coast are optimized for heavy oil.
