Keystone XL may hang in balance on U.S. project rethink

IRJ – November 11 – U.S. State Department decisions to delay the US$7 billion Keystone XL oilsands pipeline have garnered mixed responses from project opponents and industry, as the authorities bag more time to investigate any environmentally sensitive impacts which may result from its construction.

TransCanada’s proposed 1,661-mile pipeline—the project set to transport 700,000 barrels a day of crude from Alberta in Canada and the Gulf coast of Texas, via Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas—may now be destined for another route. Press speculate whether Canadian producers and U.S. refiners who have already signed up to make use of the pipeline, may now start searching for another means of passage between the North American oil hubs. A re-routing of the project may also adjust the fees pipeline users have to pay, which could cause them to rethink plans in terms of transit cost, and potentially lose the project owners vital business. First estimations state that a change of this nature may require another 250 miles of pipeline, adding $1.6 billion to the $1.9 billion TransCanada has spent on the project to date.

Amid the areas of concern are the Nebraska Sandhills region and aquifers, and an email sent by the Department on November 10 now reveals that the process, no longer on track for a final verdict by the year-end, ‘could be completed as early as the first quarter of 2013.’

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