Builder Of Controversial Keystone XL Pipeline Says It's Moving Forward

Enlarge this image toggle caption Nati Harnik/AP Nati Harnik/AP

After a decade of protests and political reversals in the U.S., the Canadian company behind the controversial Keystone XL oil pipeline says it has made a final decision to build the long-delayed project. Once completed, it would deliver more than 830,000 barrels per day of crude oil from Alberta's oil sands, or "tar sands," region to the United States.

TC Energy, formerly known as TransCanada, says in a statement the project will invest $8 billion into the North American economy and provide "thousands of well-paying jobs during construction."

That may be welcome by some as economies have taken a hit from the global coronavirus pandemic. But others worry construction workers traveling to rural communities along the pipeline route will help spread the virus. The 1,210-mile pipeline would be built between Hardisty, Alberta, and Steel City, Neb.

"Our rural communities are strained as it is for medical supplies and hospital beds amid a global pandemic. TC energy must put an end to any construction in our small towns as the pandemic grows across our country," says Jane Kleeb, founder of Bold Nebraska.

TC Energy never had the money to build this risky, unnecessary pipeline and now the Albertan government is bailing them out.

The group launched an online petition before today's announcement that urged the company to stop all construction on the pipeline. TC Energy says it's taking the pandemic into account.

"During construction, we will continue to take guidance from all levels of government and health authorities to determine the most proactive and responsible actions in order to ensure the safety of our crews and community members during the current COVID-19 situation," says Russ Girling, president and CEO of TC Energy.

Girling thanked politicians who helped move the project forward. He specifically mentioned President Trump, who restarted the Keystone XL approval process shortly after taking office in 2017.

Former President Barack Obama had blocked construction in 2015, citing environmental concerns. As NPR reported in 2015, the kind of oil the pipeline would transport comes out of the ground as a thick, gooey substance that has to be processed with heat. That means it emits more greenhouse gasses than traditional oil drilling.

Girling also thanked Alberta Premier Jason Kenney. As part of today's announcement, the Alberta government says it is investing about $1.1 billion (C$1.5 billion) in the project, which the company says will cover construction costs through 2020. Alberta's government also is giving the company a $4.2 billion (C$6 billion) loan guarantee in 2021.

"We cannot wait for the end of the pandemic and the global recession to act. There are steps we must make now to build our future focused on jobs, the economy and pipelines," Kenney says.

Key decision comes amid an epic oil glut

Kenney's administration argues the Keystone XL will provide North America a stable, secure supply of crude oil and reduce reliance on the OPEC cartel. But the announcement comes as there is an epic glut of oil and prices have reached their lowest level in nearly two decades.

Opponents argue the project has never been economically viable because tar sands crude is some of the most expensive in the world to produce.

"TC Energy never had the money to build this risky, unnecessary pipeline, and now the Albertan government is bailing them out," Kleeb says.

Kleeb predicts that if a Democrat is elected president in November, they will once again block the project. While Bernie Sanders has long opposed the project, Joe Biden's name is noticeably absent from her group's "NoKXL Pledge." Aside from that, she says the project also faces legal challenges that still must be overcome.

"The Keystone XL pipeline was a nonstarter a decade ago, and it remains one today," says Hannah McKinnon with Oil Change International, which has long challenged the economics of the project. McKinnon says governments should instead invest in cleaner forms of energy that can help meet goals to address climate change.

TC Energy claims the project is profitable. The company says it has 20-year agreements with companies to transport 575,000 barrels of crude a day, which the company estimates will generate $1.3 billion a year in profits.

The company already has started construction work along the route and expects the Keystone XL pipeline will be in service in 2023.