Work to Begin Building Part of Keystone Pipeline
Policy + Politics

Work to Begin Building Part of Keystone Pipeline

REUTERS/TransCanada Corporation/Handout

The Canadian firm hoping to build a massive oil pipeline from Canada to the U.S. gulf coast announced Monday that it will push ahead with plans to build a $2.3 billion segment of the pipeline running from Cushing, Okla., to Port Arthur, Tex., while submitting a separate permit application for the portion of the project running from the Canadian border to Steele City, Neb.

The move by TransCanada would alleviate the glut of oil at Cushing, a major terminal, and address one of the main reasons for building the controversial Keystone XL pipeline. Plans for the segment of pipeline crossing the U.S.-Canada border would come “in the near future” the company said.

President Obama and congressional Republicans have feuded for months over whether to grant a federal permit for the pipeline extension. Obama rejected the permit last month when faced with a congressionally mandated deadline of Feb. 21, though he said at the time he supported the idea of expanding shipping capacity between Cushing and the Gulf of Mexico.

TransCanada’s Keystone XL proposal became entangled at the State Department, which handles cross-border pipeline proposals. But the segment of the pipeline from Oklahoma to Texas would not require State Department approval. The company said that segment “has its own independent value to the marketplace and will be constructed as a stand-alone Gulf Coast Project, not part of the Presidential Permit process.”

The company said that 4,000 jobs would be created to build the Oklahoma to Gulf Coast segment.

Proponents say the full Keystone XL project would enhance the nation’s energy supply and create short-term construction and manufacturing jobs; foes said the energy-intensive extraction of Alberta’s oil sands will accelerate climate change and the oil could spill onto sensitive habitat along its route.

Nebraska was in the middle of reevaluating an alternative route for the pipeline when Congress imposed a 60-day deadline for approval or denial of the permit and Obama rejected it , so that process is now on hold.

TransCanada said Monday that it is still working on an alternative route for the Nebraska segment so that it circumvents the environmentally sensitive Sandhills area.

“TransCanada will continue to work collaboratively with the State of Nebraska on determining an alternative route for Keystone XL that avoids the Sandhills,” the company said in a press release.

All the major GOP presidential hopefuls have criticized Obama for blocking the pipeline and have pledged to approve it if elected president. Sen. Richard Lugar (R-Ind.) issued a statement blaming Obama for the firm’s change in plans.

“President Obama’s denial of the Keystone XL pipeline permit is an absolutely monumental dodge of responsibility,” Lugar said. “Americans are screaming for more affordable oil supplies. The irony is that Democratic Senate leadership is calling for more oil from Saudi Arabia even as they continue to oppose oil from Canada. President Obama has turned his back on secure, affordable oil supplies of domestic oil from North Dakota and Montana, and from our vital ally Canada.”

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