Trump signs Keystone order, wants terms renegotiated

Trump signs Keystone order, wants terms renegotiated

ADRIAN MORROWAND SHAWN MCCARTHY

The Globe and Mail

Published Tuesday, Jan. 24, 2017 9:28AM EST

Last updated Tuesday, Jan. 24, 2017 12:11PM EST

Donald Trump has signed an executive order paving the way for the Keystone XL pipeline, the President’s first concrete step on U.S.-Canada relations and a move that makes good on his pledge to make it easier for the oil industry to do business.

Mr. Trump signed the orders greenlighting Keystone and the Dakota Access Pipeline at the White House Tuesday shortly after 11 am.

But he warned that he would “renegotiate some of the terms,” without elaborating, suggesting there may still be a bumpy road ahead – and possibly more costs – for TransCanada Pipelines and the Canadian government.

“Subject to a renegotiation of terms by us – we’re going to renegotiate some of the terms. And if they’d like, we’ll see if we can get that pipeline built,” he said.

Mr. Trump did not elaborate on exactly what the terms will entail, but governments have in some cases demanded payments from pipeline companies: British Columbia, for instance, required Kinder Morgan to agree to pay up to $1-billion over 20 years for permission to get its Trans Mountain pipeline built.

The President also signed an order requiring that pipelines built use American pipe.

“If we’re going to build pipelines in the United States, the pipes should be made in the United States,” he said. “We will build our own pipelines; we will build our own pipes…like we used to in the old days.”

Mr. Trump signed a further order rolling back the environmental approval process for infrastructure projects, in what he said was a bid to get decisions made more quickly.

Giving federal approval to Keystone reverses a decision by former president Barack Obama to block the project under pressure from environmental groups.

The pipeline became a flashpoint in the fight against climate change, with green groups arguing that such projects had to be stopped in order to keep oil in the ground and cut the greenhouse gas emissions that contribute to climate change. It also drew opposition from farmers, ranchers and First Nations along the route, who feared spills and environmental damage to their land.

The Alberta and Canadian governments, meanwhile, contend the project is vital for getting landlocked oil sands bitumen to international markets. They had the backing of the U.S. oil industry and a majority of Congress, including members of both parties. The pipeline would deliver oil from Alberta to refineries on the U.S. gulf coast.

At a cabinet meeting in Calgary, Liberal ministers welcomed Mr. Trump’s move on Keystone.

“As a government that has strongly supported Keystone from day one, we welcome this U.S. decision,” Foreign Affairs Minister Chrystia Freeland said. “And I do want to emphasize [that] our position from the start has been the environment and economy go together. We really believe that it is not just possible but essential to have strong policies on climate change – the strongest policy a government of Canada has ever had on putting a price on pollution – and at the same time to fulfill our duty as a government to get natural resources to market. And I think we’re getting there.”

In late November, the Liberal government approved two major pipeline expansions, Kinder Morgan Inc.’s Trans Mountain line to Vancouver harbour and Enbridge Inc.’s Line 3 that carries crude to the U.S. MidWest, that together boosted export capacity by a million barrels per day.

Natural Resources Minister Jim Carr noted TransCanada has received all Canadian permits it needs to construct Keystone XL and that it is now up to the U.S. president to act. However, the company also needs a permit from the state of Nebraska.

 

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on January 24, 2017, in economic impact, oil, political. Bookmark the permalink. Leave a comment.

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