Case for Keystone XL has grown stronger, TransCanada tells Kerry

Canada is taking strong steps toward combating climate change, and the proposed Keystone XL pipeline crude oil pipeline remains in the US national interest, TransCanada Corp. said in a June 29 letter to US Sec. of State John F. Kerry and two senior State Department officials.

“Given the passage of time, the facts supporting the proposed project have continued to build,” Kristine Delkus, TransCanada’s executive vice-president and general counsel, said in the letter to Kerry; Amos Hochstein, special envoy and coordinator for international energy affairs at DOS’s Bureau of Energy Resources; and Judith G. Garber, acting assistant secretary for oceans and international environmental and scientific affairs.

“For this reason, as a prudent applicant, TransCanada believes it is necessary to provide [DOS] with updated information on recent developments,” Delkus said. These developments include:

• The Canadian government’s May 15 announcement that it intends to cut greenhouse gas emissions to 30% below 2005 levels by 2030. The government also plans to develop additional regulatory measures, including rules aligned with recently proposed US steps to reduce methane emissions from oil and gas operations, Delkus said.

• The Alberta government’s announcement that it will double its carbon tax to $30 (Can.)/tonne and require further emissions intensity reductions to 20% from the current 12% by 2017. Oil sands and other companies there must either reduce their emissions, purchase offsets, or pay the carbon price into a fund to establish GHG emissions reduction technologies.

• Canada, the US, and Mexico’s joint announcement in May that they were forming a North American energy ministers’ working group on climate change and energy, which expands the North American Energy Ministers’ Working Dialogue that was established in 2014.

• Continued implementation of the Air Quality Management System the Canadian government established in 2013 as a collaboration of federal, territorial, and provincial governments; industries; and nongovernment organizations. One of the system’s components will be emissions requirements with specific limits for oil and sands and other major Canadian industries, Delkus said.

• Growing oil industry support for a carbon tax, particularly a call by six major oil companies—including oil sands producers BP PLC, Royal Dutch Shell PLC, Statoil ASA, and Total SA—for a harmonized policy in a joint letter to the United Nations Framework Convention on Climate Change.

• Alberta’s plans to invest more than $1.3 billion (Can.) over 15 years in two large-scale, oil sands-related carbon capture and storage projects—the Alberta Carbon Trunk Line and Quest Projects. The projects will start up in 2015 and store 2.76 million tonnes/year of carbon dioxide, or the equivalent of taking 550,000 cars/year off the road, Delkus said.

The letter was sent close to the fifth anniversary of the start of the Keystone Pipeline’s operations from Alberta to refineries in Illinois and the Gulf Coast, which has safely transported nearly 1 billion bbl of Canadian and US crude oil since 2010 after receiving a presidential permit in 2½ years, TransCanada said on June 30.

Keystone XL, the proposed 1,179-mile segment from Hardisty, Alta., to Steele City, Neb., has been mired in US regulatory delays since 2008, it noted.

“Clearly, recent Canadian, North American, and international GHG policy developments are consistent with [US President Barack Obama’s] stance on not exacerbating the risk of climate change,” TransCanada Executive Vice-Pres. for Development Alex Pourbaix said.

“We are asking [DOS] to consider these recent developments that add to the abundance of evidence already collected through 7 years and 17,000 pages of review that Keystone XL will not ‘significantly exacerbate’ greenhouse gas emissions,” he said.

Contact Nick Snow at nicks@pennwell.com.

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