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Hope for embattled lines
Trump issues new presidential approval for Keystone XL; green light for Line 3
Gary Park for Petroleum News
SAnother day another twist in Canada’s tangled pipeline tale.
Only this time, when proponents of those working to build new export links for oil sands bitumen seem to face endless adversity, there was a shred of hope in the news.
Leading the way was President Donald Trump, who unexpectedly issued a new permit for TransCanada’s Keystone XL line.
It was accompanied by confirmation from the Minnesota Public Utilities Commission of its earlier approval for Enbridge’s plan to replace its Line 3 system.
Out of the White House came word that Trump had decided to undercut legal challenges to the US$8 billion XL project he had already endorsed in March 2017 after President Barack Obama denied a permit on grounds that the bitumen shipments of 800,000 barrels per day to Gulf Coast refineries would contribute to global warming.
A White House spokesperson said the new permit issued by Trump “dispels any uncertainty” about the project.
“Specifically, this permit reinforces, as should have been clear all along, that the presidential permit is indeed an exercise of presidential authority that is not subject to judicial review,” she said.
Legal war declared Whatever the Trump administration view of the president’s powers, the opponents of XL wasted no time declaring a legal war on the action.
Stephan Volker, an attorney for environmentalists who sued to stop the project, accused Trump of launching a “direct assault on our system of governance,” vowing to seek a court order blocking TransCanada from resuming construction.
He said Trump has attempted to “overturn our system of checks and balances” in making an attack on “our Constitution ... it must be defeated.”
Anthony Swift, director of Keystone XL for the national Resources Defense Council, said the pipeline was a “bad idea from Day 1” because of the threat it posed to land, drinking water and communities from Montana and Nebraska to the Gulf Coast.
Not tied to review Unlike an earlier State Department permit, which was issued after an extensive environmental analysis required under the National Environmental Policy Act, the new presidential permit is not directly tied to any such review.
The NEPA statute that generally compels environmental study of energy projects does not apply to the president.
That raises questions about a 2014 ruling by U.S. District Judge Brian Morris in Montana that the government must consider oil prices, greenhouse-gas emissions and formulate a new spill-response strategy before allowing the pipeline to move forward.
Analysts with ClearView Energy Partners, an independent consulting firm, said Trump’s decision to override the previous presidential permit “appears to render ...moot” an appeal of Morris’s ruling. That in turn could end delays in a further State Department environmental review and void an injunction blocking pre-construction, possibly allowing TransCanada to resume that work in August, they said.
TransCanada Chief Executive Officer Russ Girling praised Trump for making it clear “he wants to create jobs and advance U.S. energy security and Keystone XL does both of those things.”
U.S. refiners have been seeking new supplies of heavy crude after sanctions against Venezuela have reduced imports from that country to zero, while Canadian producers have been desperate to get new export pipelines built.
Line 3 The US$9 billion Line 3 plan proposal covering 1,000 miles of aging pipe from Alberta to Wisconsin and doubling current capacity to 760,000 bpd gained a sizeable boost when the Minnesota PUC unanimously rejected the last pending petitions to block construction, including one from the Minnesota Commerce Department to join Indian tribes and environmental groups in challenging project approvals.
Minnesota Gov. Tim Walz, who has opposed Line 3, said his administration will study the PUC ruling before deciding on its next steps.
Enbridge still needs state and federal permits, which it hopes to obtain later this year.
It had earlier forecast that the regulatory delays could postpone completion of the pipeline replacement by almost a year until the second half of 2020.
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