Editor’s Message: Second Chance Brings Back the Keystone

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I don’t want to toot my own horn, but I totally predicted this would happen in last month’s editor’s message.

A few years ago, it seemed like all I ever wrote about was TransCanada’s Keystone XL pipeline. The massive project was going to bring crude oil from the Canadian oil sands, as well as provide an outlet for the landlocked Bakken crude. After more than seven years of extensive review and assurances that the pipeline would be among the safest ever constructed, the bottom fell out.

Former President Barack Obama denied the project a crucial permit for pipelines that cross the U.S.-Canadian border. TransCanada sued. The project was relegated to the backburner.

But with one swipe of his pen, newly elected President Donald Trump turned the heat back up on the burner for the long-simmering project. On Jan. 24, the president signed an executive order that invited TransCanada to once again apply for a Presidential Permit and mandated the project receive expedited treatment. Two days later, TransCanada accepted that invite and reapplied for the permit to approve the Keystone XL pipeline.

I know it’s been a long time, so in case you’ve forgotten, here’s a quick recap of the controversial pipeline. The proposed project involves the construction of a 1,179-mile, 36-in. diameter crude oil pipeline from Hardisty, Alberta, to Steele City, Nebraska. At an estimated cost of $5.3 billion (USD), the pipeline will transport crude oil from Canada, as well as the Bakken shale region of Montana and North Dakota. The pipeline will have the capacity to transport 830,000 barrels per day (bpd) to Gulf Coast and Midwest refineries. According to Trump’s executive order, the U.S. State Department has 60 days from Jan. 26 — the date TransCanada submitted its new application — to review the project and render a decision on the Presidential Permit.

On the same day, Trump also signed an executive order to revisit Energy Transfer Partners’ Dakota Access Pipeline. The proposed 30-in. pipeline runs 1,172 miles from the Bakken/Three Forks production area in North Dakota to refining facilities in Patoka, Illinois. The project is largely built except of a short portion that was to be installed at a minimum of 95 ft below Lake Oahe. The project has already cost more than $3.5 billion to construct.

With two major pipeline projects receiving a second look in the early going of 2017, not to mention a number of smaller projects on deck for the year, the pipeline industry appears poised to get back on the upswing after more than two years of downturn.

By the end of March, we will have clarity about the future of the Keystone XL project. That sets up nicely for the summer construction season. Let’s embrace the good in 2017 and continue to improve North America’s oil and gas transmission infrastructure.

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