Page 4 - NorthAmOil Week 13

NorthAmOil COMMENTARY NorthAmOil
Alberta throws weight behind Keystone XL
The government of Alberta has agreed to invest in the Keystone XL pipeline, allowing operator TC Energy to begin construction on the long-delayed project
NORTH AMERICA
WHAT:
TC Energy has given the go-ahead for construction to begin on the Keystone XL pipeline.
WHY:
The Alberta government has agreed to invest $1.1bn as equity in
the project, as well as guaranteeing a credit facility.
WHAT NEXT:
Alberta’s move comes
in anticipation of the US presidential election in November, which poses a risk to Keystone XL.
CANADA’S TC Energy has surprised the mar- ket, by announcing that it has given the go-ahead for construction to begin on the long-delayed Keystone XL pipeline from Alberta to Nebraska. The move comes with the help of the Alberta government, which has agreed to invest $1.1bn into the project as equity, as well as saying it will provide a loan guarantee to help finance construction.
Government support for pipelines is not without precedent in Canada, with Ottawa buying the Trans Mountain pipeline and planned expansion project in 2018 over con- cerns that previous operator Kinder Morgan would abandon the project. No such con- cern had been publicly expressed about Key- stone XL, but initial reaction suggests that the move to support the project is being made in anticipation of the US presidential election in November. If a Democrat wins, it is possible that the permit issued for the pipeline by US President Donald Trump could be revoked. It has thus been suggested that the government of Alberta is moving to mitigate political risk for Keystone XL.
Road to construction
It has been a long journey for Keystone XL, which was first proposed by TC Energy – then known as TransCanada – in 2008. In 2015 former US President Barack Obama denied it a permit, citing concerns over the pipeline leading to increased greenhouse gas (GHG) emissions from Canada’s oil sands if it were built.
The presidential permit was quickly issued by Trump after he took office in 2017, but was not the end of the process, with Keystone XL sub- sequently becoming tangled up in litigation. In November 2018, US District Court Judge Brian Morris in Montana invalidated the presidential permit, ruling that the Trump administration had failed to conduct the necessary environ- mental review on Keystone XL. This prompted Trump to reissue a permit for the pipeline in 2019.
However, another court hearing before Mor- ris is set for April 16 as environmental groups continue to challenge the legitimacy of the presidential permit, and the pipeline may thus encounter further delays.
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w w w . N E W S B A S E . c o m Week 13 02•April•2020