Lessons learned — after the fact

When it comes to figuring out how Keystone XL finished in such a pickle, there is no end to the blame game.

You can pin the plight on Hollywood stars such as Margot Kidder and Robert Redford, who lent their names to environmental protests; or the environmentalists themselves, labeled by Canada’s Natural Resources Minister Joe Oliver as foreign-funded “radicals”; or the politically agitated state of Washington, D.C.; or the deliberate misinformation spread by many special interest groups.

And then there’s TransCanada itself, a company, rightly or wrongly, known for its hard-headed ways, no matter who it is dealing with.

These days there’s plenty of time to ponder how TransCanada got itself into so much trouble when there are plenty of critics suggesting it could easily have opted to re-route the pipeline at the first sign of trouble and avoided the Sand Hills region of Nebraska, having already bypassed the Ogallala Aquifer, which encroaches on six states.

By some estimates, shifting the right of way might have added about $400 million to a budgeted $7 billion project, thus avoiding the additional costs it now faces to do exactly that.

Even TransCanada Chief Executive Officer Russ Girling has conceded the Obama administration’s rejection of the original Keystone XL application is “one of the scenarios” his company had anticipated.

Instead, it appeared to underestimate the combined power of a loosely knit coalition of environmentalists, academics, ranchers, celebrities and Nobel laureates, 1,000 of whom got themselves arrested outside the White House — many of them pursuing an agenda to shut down the oil sands altogether — forcing TransCanada to make a belated start on lobbying and advertising when the damage had been done.

Not anymore. Alex Pourbaix, the company’s president of energy and oil pipelines, told investors that “one of the things we’ve learned through this process is we have to be a lot more proactive in dealing with emotional issues.”

TransCanada may also have missed an answer to the Nebraska challenge that had previously engaged privately held Altex Energy, which surfaced six years ago with plans for a possible 425,000 barrels per day bullet line from Alberta to the Texas Gulf Coast.

In developing its proposal, Altex identified one trouble spot, Chief Executive Officer Glen Perry told the Globe and Mail — the “boiling sands” of Nebraska that are so thin that groundwater from the Ogallala can bubble through them to the surface.

However, before Altex could get to grips with that problem, the recession of 2008 put an end to its hopes.

In the meantime, the U.S. State Department ruled two months ago that TransCanada needed to “undertake an in-depth assessment of alternative routes in Nebraska.”

TransCanada agreed almost immediately to sidestep the Sand Hills, prompting observers to wonder why it hadn’t acted sooner.

Altex, meanwhile, is doggedly working on other solutions, including a partnership with Canadian National Railway Co. to promote the use of rail to carry crude.

It views rail as a possible transition from conventional pipelines to new pipeline technology, including its own efforts to develop a proprietary diluents to replace conventional diluents to thin bitumen for easier movement through pipelines.

—Gary Park