SHAWN McCARTHY, Globe and Mail, Apr. 15, 2011
The U.S. State Department has rejected many of the key arguments of opponents of TransCanada Corp.’s (TRP-T40.070.380.96%) Keystone XL pipeline, setting the stage for the likely approval of the project later this year.
In a draft environmental impact statement issued Friday, the department highlighted the growing demand for a “stable and reliable” source of Canadian crude among U.S. Gulf Coast refiners, which now rely heavily on imports from offshore.
And it noted that the rejection of the XL pipeline “would increase market incentives” for Canadian producers to pursue new export markets in rapidly growing Asian countries by way of new or expanded pipelines to the West Coast.
TransCanada said it had only received a copy of the 900-page report late Friday and could not yet comment on it.
“We’re pleased that the process continues to move forward,” company spokesman Shawn Howard said in a telephone interview from Calgary. “This is in keeping with the State Department’s commitment to have a decision on the permit by the end of the year.”
Opponents will now have 45 days to comment on the draft environmental impact statement, and the department will then decide whether or not to issue a permit for the cross-border pipeline.
Environmental groups condemned both the report and the short comment period. They had urged a 120-day delay with full public hearings along the pipeline route, where many residents are opposed to the project.
“It’s been a concern that a lot of people have been developing – that the State Department is not taking this environmental analysis seriously,” said Alex Moore, a Washington-based campaigner at Friends of the Earth.
“I think a lot of people are concerned that this may be in the bag, and I hope that’s not the case because President [Barack] Obama has committed to transitioning us to clean energy.”
The Obama administration has also said the U.S. will continue to rely on imports from “secure” sources like Canada and Mexico as it attempts to reduce its crude imports by one-third, and switch to cleaner fuels that emit less greenhouse gases.
War and revolution in the Middle East have underscored how vulnerable overseas crude markets are to political upheaval, with the Libyan conflict driving oil prices to heights not seen since the price spike of 2008.
