The company that obtained a permit to build the controversial Keystone XL oil pipeline might decide not to build it.
A TransCanada Corp. executive told investors Friday that it is still assessing interest in Keystone among the oil companies that would pay to use the Canada-to-Texas line, as well as seeking remaining regulatory approvals, and it will likely decide in November or December whether to build.
The disclosure means that one of President Trump’s signature energy policy promises — to approve Keystone and get it built — may fall victim to commercial pressures and not get done.
Trump approved Keystone’s permit to cross the border with Canada in March. It ended a significant chapter in the decadelong saga, ending years of delay under former President Barack ObamaBarack Hussein ObamaObama says US 'desperately needs' Biden legislation ahead of key votes Obamas to break ground Tuesday on presidential center in Chicago A simple fix can bring revolutionary change to health spending MORE — and a rejection of the permit in late 2015 — that the oil industry and Republicans frequently criticized.
But Paul Miller, president of TransCanada’s liquid pipelines business, told investors in a quarterly earnings call that Keystone XL is far from certain.
He said the Canadian company is launching an “open season” to actively seek out contracts for the $7 billion pipeline with a capacity of 830,000 barrels, through September. The company also needs approval from Nebraska for its route through that state.
“Our assessment of these factors will really drive our investment decisions when we get into that November-December time frame,” he said.
“In the event that we do decide to proceed with the project, we still need probably six to nine months to do some of the staging of the construction crews, etc. And that would be followed by about a two-year construction period.”
Miller said TransCanada is hoping for a “significant” level of contracts and declined to say if less than full capacity would be acceptable.
The executive said that it lost some potential customers with Obama’s 2015 rejection of the pipeline, though many have come back with the new approval.
“We have had good conversations with our existing shipper group as well as new entrants as they work their way through their analysis and documentation,” he said.
Keystone XL was planned to bring significant new capacity to oil extraction in Alberta’s oil sands and the Bakken region in the United States, which have seen massive growth in production over the last decade.
But other pipelines, as well as oil transported over railroads, have been filling the void in Keystone’s absence.