Keystone XL pipeline moves ahead, but what does it mean for Saskatchewan?

Keystone XL pipeline moves ahead, but what does it mean for Saskatchewan?


Published on: March 24, 2017 | Last Updated: March 24, 2017 5:24 PM CST


After much delay, U.S. President Donald Trump has approved the permit for the Keystone XL pipeline.

On Friday, Premier Brad Wall was pleased with the news.

“It’s been permitted by the president and that’s good for Evraz,” he told reporters. “Evraz in Regina employs about 900 people and they make pipes. and we know they are going to be part of that Keystone project, so that’s good.”

He believes the pipeline is good news for Saskatchewan because it will go through the southwest part of the province, which means jobs.

Keystone XL route map

“We know there will be well over a million in local taxes because pipelines are assessed and pay taxes,” said Wall.

In the long run the pipeline will have a positive ripple effect for oil production.

“Another reason why it’s important to Saskatchewan, even though it will not be Saskatchewan oil in the pipeline, anytime we get Canadian oil to tidewater, in this case the Gulf, we lower the differential  — the discount at which we have been selling our oil forever,”  said Wall. “That discount is between the Brent price for crude and west Texas price, which is what we get in Canada. We have only ever had one customer — the United States. If we can get our oil to tidewater we can get more customers and we get a better price.”

He said there will be Regina pipe used in the pipeline if it is constructed.

“The Keystone has been expressly exempted from the president’s executive order on Buy America,” said Wall. “By the way, this is a case we are making in America when we are there is that we would like to see the Buy America provision removed from pipelines, because Evraz would like to continue to sell pipe into projects in places like Texas and Louisiana.”

A presidential permit for Keystone XL reverses the veto by then president Barack Obama in late 2015, who rejected the project on environmental grounds.

The presidential permit comes days before the end of the 60-day timeline for a decision on the US$8-billion project, set in January. Although Trump had indicated he wanted only U.S. steel pipe used in the project, that condition was reversed because a significant portion of the steel to be used for the pipeline had already been produced by an Arkansas-based company majority-owned by Indian conglomerate Welspun Group and by Evraz.

Even with the presidential permit, the company still needs to secure several state-level permits before construction can begin.

The Keystone Xl pipeline project was delayed many times due to protests over environmental concerns.




About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on March 27, 2017, in economic impact, oil, political. Bookmark the permalink. Leave a comment.

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