TC Energy Reacts to Keystone Pipeline Development
TC Energy Corporation (TSX, NYSE: TRP) has announced that it is disappointed with the expected action to revoke the existing Presidential Permit for the Keystone XL pipeline and said it would directly lead to the layoff of thousands of union workers.
The company noted that it will review the decision, assess its implications and consider its options. It added, however, that as a result of the expected revocation of the Presidential Permit, advancement of the project will be suspended. TC Energy said it will cease capitalizing costs, including interest during construction, effective January 20, 2021, and added that it will evaluate the carrying value of its investment in the pipeline. Absent intervening actions, the company said these steps could result in a predominantly non-cash after-tax charge to earnings in the first quarter of this year.
Looking forward, TC Energy said it is well positioned to capture significant additional growth opportunities that are expected to arise as the world both consumes more energy and transitions to a less carbon intensive energy mix.
“Our base business continues to perform very well and, aside from Keystone XL, we are advancing $25 billion of secured capital projects along with a robust portfolio of other similarly high quality opportunities under development,” François Poirier, TC Energy’s president and chief executive officer, said in a company statement.
“These initiatives are expected to generate growth in earnings and cash flow per share and support annual dividend increases of eight to ten percent in 2021 and five to seven percent thereafter,” he added.
Commenting on the latest Keystone XL Pipeline development, American Petroleum Institute (API) President and CEO Mike Sommers said, “revoking the Keystone XL pipeline is a significant step backwards both for environmental progress and our economic recovery”.
“Pipelines are the safest, most environmentally friendly way to transport energy, and the economy cannot recover at full speed unless we deliver reliable energy from where it is to where it is needed. The Keystone XL Pipeline has been through more than ten years of extensive environmental reviews, and … [the] announcement is a slap in the face to the thousands of union workers who are already a part of this safe and sustainable project,” he added.
“This misguided move will hamper America’s economic recovery, undermine North American energy security and strain relations with one of America’s greatest allies,” Sommers continued.
In a statement posted on the White House website, U.S. President Joe Biden said the Keystone XL pipeline disserves the U.S. national interest.
“Leaving the Keystone XL pipeline permit in place would not be consistent with my Administration’s economic and climate imperatives,” he added in the statement.
Keystone XL’s website notes that the project comprises a 1,210-mile pipeline capable of delivering 830,000 barrels per day of crude oil from Hardisty, Alberta, to Steele City, Nebraska. The site touts that construction of Keystone XL would create 13,200 high-quality jobs and local contracting opportunities for welders, surveyors, engineers, environmental specialists and more for communities and Indigenous groups. Overall, construction was expected to support nearly 60,000 direct, indirect and induced employment opportunities.
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