TransCanada CEO Russell Girling with President Donald Trump after Trump announced the final approval of the Keystone XL Pipeline on March 24. Too soon to say whether Keystone XL will be built, TransCanada exec says

The company behind the Keystone XL pipeline has not yet determined whether there is enough demand for the project to justify actually building it, a top executive said today.

It was the strongest acknowledgment from TransCanada to date that the nearly decade-long Keystone saga may end in failure — despite President Donald Trump's overwhelming support for the project, which he green-lit as one of his first acts in office. The company says it remains confident in the project. But it has been struggling to find enough customers, and it still needs approval from Nebraska regulators for the pipeline's route, which landowners and activists in the state have been fighting since the project was first proposed.


TransCanada on Thursday called for an “open season” on Keystone XL, a process in which potential customers are invited to bid for contracts to ship oil on the pipeline, which would connect oil sands in Alberta with refiners and export opportunities in the U.S. The open season will last until September, TransCanada Executive Vice President Paul Miller said during the company’s second-quarter earnings call today.

A decision on whether to follow through with construction of the $7 billion pipeline will come later, he said.

"In November, we’ll make an assessment of commercial support and [Nebraska] approval," Miller said. "In the event we do decide to proceed on the project, we’ll need six to nine months” before construction could start.

It would be another two years once construction begins before the project comes online, Miller added.

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If TransCanada decides to build, that schedule means oil would start flowing through the pipeline just before the 2020 presidential election — but that any further delays could complicate Trump's ability to boast about Keystone when he runs for re-election.

On the campaign trail last year, Trump promised to green-light the pipeline, saying "I want it built, but I want a piece of the profits." When he approved the project in March, Trump did not apply any special conditions to his approval of the project that would have required TransCanada to share its profits, and he backed away from another promise to make the company use all U.S.-made steel for the pipeline. He seemed caught off guard when TransCanada CEO Russ Girling told him in a televised Oval Office appearance that construction was not imminent.

Keystone XL would transport up to 830,000 barrels a day of heavy crude from oil sands in western Canada to Steele City, Neb. From there it would go to refiners in the Midwest and along the Gulf Coast, where it also could be exported thanks to Congress lifting the oil export ban in late 2015 after then-President Barack Obama had denied an earlier permit for the line.

But refiners have been able to take delivery of Canadian crude without Keystone XL, using either rail cars or alternative pipelines. Oil imports from Canada grew to 3.8 million barrels a day in 2016, up 52 percent from when TransCanada first proposed the pipeline in 2008, according to EIA data.

One problem facing TransCanada is that much of the new demand for oil is coming from Asia. Canadian oil shippers would most likely prefer to ship oil to the west coast via Kinder Morgan’s proposed TransMountain pipeline or rail car for easier export to Asia, said Rusty Braziel, president of energy consulting firm RBN Energy.

“If you’re a producer in Alberta, the conundrum you face here is you really want to go west. Do you want to take barrels to the Gulf coast and fight with everyone else sending barrels through the Gulf Coast? Hell no.”

TransCanada is also trying to woo back companies who had signed on for Keystone XL but then dropped away after Obama denied the cross-border permit it needed, Miller said.

“When the permit was decided in late 2015, many of our shippers reviewed other options," Miller said.

TransCanada spokeswoman Jacquelynn Benson said the company "maintains shipper support for the project and remains committed to Keystone XL. We are confident that we will have the support we need to move this project forward as we seek additional shipper commitments through the open season."