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Keystone XL: Uncertainty Continues for 2014

The prospects for the Keystone XL pipeline, now heading into its fifth year of approval purgatory, remain uncertain, with project owner TransCanada saying it’s confident the Obama administration will give it the green light early 2014, while opponents step up pressure on the White House to consider the potential of heavy crude oil spills.

The US State Department is preparing its final environmental review of the Keystone XL pipeline, and environmentalists are expecting a more serious effort than the draft analysis released in March, while Obama has said he would not approve Keystone XL if it “significantly exacerbates” carbon emissions.

TransCanada CEO Russ Girling told reporters he expected the final review would be released in the coming weeks and that he is “very confident” Obama will approve the project.

"I remain 100 percent confident that this project makes sense for energy security and all the jobs and economic benefits that come with it," Girling told Bloomberg.

Girling claims that a rejection of the project would harm US-Canadian relations as Canada is the largest supplier of crude oil to the US.

It is already the second time TransCanada has had to delay its plans this year. In mid-November, the company announced it would delay planned start-up to 2016 because it would take at least two years to complete the pipeline once approval was granted.

The Keystone XL pipeline would run from Alberta’s oil sands to the US Gulf Coast. It is for this northern leg--which cross the US border and requires presidential approval--that the environmental impact study is pending. A 2004 executive order mandated the US State Department to decide whether the project was in the national interest.

The Canadian company is now building the southern leg of Keystone XL, which does not cross the US border and does not require presidential approval.

The delays are causing the estimated costs of the project to soar. In mid-November, TransCanada raised its preliminary cost estimate for Keystone XL to at least $5.4 billion--$100 million more than its earlier estimate. This estimate could rise further, according to TransCanada.

Environmentalists are concerned at the prospect of heavy crude oil spills in one of the 1,000 bodies of water Keystone XL would traverse as it transports some 9,000 barrels of crude oil per day from Alberta to an oil hub in Cushing, Oklahoma, where it would connect up with Gulf Coast refineries via an existing pipeline.

"We're hoping the State Department will realize there's an entire analysis that needs to be completed on the spill impacts," Danielle Droitsch, director of the Canada program at the Natural Resources Defense Council, told reporters. "The emergency response plans and everything associated with that need to be completely updated."

Earlier this month, Continental Resources, one of the companies that has committed to ship crude on TransCanada's proposed Keystone XL pipeline, withdrew support for Keystone XL, saying it was no longer needed, Reuters reported.

By. James Burgess of Oilprice.com




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Leave a comment
  • bmz on December 31 2013 said:
    The alternatives to Keystone--rail and repurposing existing pipelines--are far more likely to produce oil spills.
  • Synapsid on December 31 2013 said:
    The southern leg of Keystone XL has been complete for some time and is being filled with oil; delivery is scheduled to begin on 22 January.

    The capacity of KXL is 830 000 barrels a day, not 9000.

    Continental Resources said they no longer need KXL in order to transport their production of oil from the Bakken/Three Forks in North Dakota--the statement does not refer to crude from the oil sands in Alberta. KXL exists to transport Alberta crude; oil from the Bakken/Three Forks was a minor addition.
  • Robert Bradford on January 01 2014 said:
    Crude oil is going to be shipped to the US from Canada regardless of the mode of transport. Whether that is by trains, roads or the XL pipeline.

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