Pressed during a conference ostensibly about TransCanada Corp.’s positive third quarter earnings report, TransCanada President and CEO Russ Girling was peppered with questions about the company’s request that the State Department suspend its review of the Keystone XL (KXL) pipeline.
The KXL, the beleaguered pipeline from Canada designed to move 830,000 barrels of heavy oil per day – mostly from Canadian oil sands, but some from the Williston Basin – has been in political limbo for seven years. Various iterations and environmental studies and routes have been submitted, rejected, revised and resubmitted. The most recent hold-up was Nebraska’s concerns about the pipeline murking up ecologically sensitive parts of the state; to wit, TransCanada and the locals got together and drafted a new plan that was ultimately endorsed by the governor. That’s the version now under review by the state’s environmental commission.
Girling said during the conference call that while that process – which could take up to a year to complete – there was little reason for the State Department to move ahead. In the event Nebraska rejected the plan, TransCanada would have to submit a new route to both Nebraska and the State Department anyway.
The pause will allow focus on the Nebraska route and “will achieve the best result for the project,” Girling said.
The KXL is in the jurisdiction of the White House because it would cross an international border, requiring a presidential permit.
Asked specifically if the company was delaying the process until perhaps a new, more industry-friendly president was elected next year in the United States, Girling responded with a direct, “No.”
Girling also noted that during the seven years of delays on the pipeline’s process, production hasn’t disipated and it’s being transported by less reliable railroads and trucks.
“We’ve just seen producers find alternative means to get to markets … ways that impose greater environmental risk and safety risk to the public,” he said. “At the end of the day, it makes sense to replace that … with a safe, modern pipeline.”
To that end, TransCanada didn’t have a bad third quarter, especially given the markets. The company, of which about 10 percent depends on commodities prices, declared a dividend of $0.52 per common share for the quarter ending Dec. 31. And, despite reporting a 12 percent decline in earnings, the company still managed to increase revenue ahead of expectations.
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