Trump win renews pipeline push
- 10 Nov 2016
- Calgary Herald
- GEOFFREY MORGAN
- With files from Postmedia News
Trump win renews pipeline push
Incoming U.S. president seen as ally for Keystone XL
The controversial Keystone XL pipeline, all but dead under U.S. President Barack Obama, may find new life under pro-oil president elect Donald Trump, who has vowed to reverse course on much of Obama’s energy and environmental agenda.
TransCanada Corp. said Wednesday it is considering how to pitch the next president on the benefits of the proposed, and denied, pipeline that would give oilsands crude better access to U.S. markets.
“We are evaluating ways to engage the new administrations on the benefits, the jobs and the tax revenues this project brings to the table,” TransCanada spokesman Mark Cooper said in an email.
He said the company “remains fully committed to building Keystone XL.”
TransCanada shares rose almost three per cent to $59.96 in Toronto trading Wednesday on speculation the president-elect will approve the 1,900-kilometre pipeline after his January inauguration.
Trump said during the campaign he would “absolutely approve it, 100 per cent,” but also said he would demand a greater financial return for the U.S. in exchange for the approvals.
Tim Pickering, president and chief investment officer at Calgary based Auspice Capital, said Trump signalled during the campaign that TransCanada should re-apply for permits to build the pipeline, but “there’s a big caveat that (he’s) going to extract a pound of flesh.”
“Unfortunately for TransCanada, they’ve had a lot of flesh extracted already,” Pickering said. The project faced seven years of regulatory delays under Obama, who eventually denied the project a presidential permit in November 2015. In response, TransCanada filed a $15-billion North American Free Trade Agreement challenge and lawsuit. In opposition to Obama’s delays, Republican lawmakers had attempted to push Keystone XL approvals through Congress and now will have another chance to do so after winning control of both houses Tuesday night.
TransCanada has said the Keystone XL line would mean “tens of millions of dollars” in annual property taxes to counties along the route and a $3-billion boost to the U.S. economy. During an oil conference in Bismarck in May, Trump unveiled an “America first” energy plan that includes reducing and eliminating “all barriers to responsible energy production.”
Premier Rachel Notley said any Keystone approval wouldn’t alleviate the need for an east-west pipeline to bypass the U.S., which has become more of a competitor and less of a consumer of Alberta oil.
“It is also true that the U.S. is now an energy exporter as well as a market for energy. Therefore, we must continue to work to diversify Canada’s energy markets, and to build trading relationships with more than one buyer. For that reason, a Canadian pipeline to tidewater remains an important priority for Alberta,” she said.
Prime Minister Justin Trudeau has supported the pipeline, while interim Conservative Leader Rona Ambrose urged Trudeau in a statement Wednesday to move quickly to push the project forward.
Canada West Foundation president and CEO Martha Hall Findlay said she expected the project would be top of mind for Washington lawmakers because “it’s a win-win for industry on both sides of the border.”
Trevor Tombe, an economics professor at the University of Calgary, said the pipeline would provide a financial boost to Canadian producers because it would reduce the discount domestic companies accept for their crude.
“Estimates vary, but Keystone alone would likely shrink the differential between WTI and Western Canadian by about $5 to $6 per barrel,” Tombe said.