Plans to move ahead with the construction
of the Keystone XL Pipeline came to a screeching halt in the U.S. late last year when President Obama denied the construction permit needed for the
Canadian-U.S. pipeline due to environmental concerns.
Now, the Canadian
company behind the project is exploring the idea of constructing new pipelines
in Mexico – where regulatory oversight and environmental opposition are less-cumbersome obstacles than in North America.
TransCanada has
found that getting approval for a pipeline in Mexico is far simpler and would cost
much less – costing TransCanada $5 million to bid on the project, compared with $2.5 billion the company has spent in the U.S. on the
project and the $700 million it invested in the Energy East project in Canada.
Additionally,
if TransCanada receives the green light for the pipeline in Mexico and acquires the necessary permits, construction would begin immediately.
“Those who oppose fossil fuels and believe they are fighting
global warming are not seeing the big picture,” Nic Porta, a former U.S. Coast
Guard officer and a volunteer chairman of West Virginia Vets4Energy, told TI News. “Oil and natural gas are going
to be in demand for decades, no matter how fast renewables are developed.
Global demand is going to be there, so the question is if we want to produce
and refine it here in North America, where the rules and regulations are
stricter, or allow other countries with less environmental concern gain the
benefits of doing it? Which is better for the environment then?”
President Obama’s rejection of the Keystone XL Pipeline
last November was a decision seven years in the making.
The Keystone Pipeline System delivers
crude oil from the oil sands in Alberta, Canada, to refineries in Texas and
Illinois, and to an oil distribution center in Oklahoma. Commissioned in 2010, the
pipeline project underwent three phases.
The
proposed Keystone XL Pipeline, Phase 4, was first proposed in 2008 and would
have shortened the route by running a new pipe through Montana and South Dakota
before joining the existing Keystone pipeline in Nebraska. The project also
would have used a larger-diameter pipe with an estimated capacity of running approximately 830,000 barrels
of crude oil a day.
But the nearly 1,200-mile proposed pipeline raised concerns at the
Environmental Protection Agency (EPA) and Democratic lawmakers, despite receiving approval
from the Canadian National
Energy Board and a permit from the South Dakota Public Utilities Commission. The EPA
worried about safety issues and the greenhouse-gas emissions. The project hung in limbo
for years awaiting a series of reviews that would ultimately influence the presidential permit needed for the new, shorter pipeline route.
Early in 2015,
the U.S. House and Senate passed a bill approving the construction of the
Keystone XL Pipeline, but President Obama vetoed the bill and said the responsibility
to approve the project fell on the executive branch, not Congress.
In announcing his rejection of the project several
months later, Obama said Secretary of State John Kerry had come to the
conclusion that the proposed Keystone XL Pipeline was not in the best interests
of the nation.
“This morning, Secretary Kerry informed me that
after extensive public outreach and consultation with other Cabinet agencies,
the State Department has decided that the Keystone XL Pipeline would not serve
the national interest of the United States. I agree with that decision,”
Obama said during the November press conference.
According
to TransCanada, the pipeline “was intended to be a critical
infrastructure project for the energy security of the United States and for
strengthening the American economy.” The energy company also said the pipeline
would have created thousands of jobs for Americans, offered increased tax
benefits for counties and communities, and provided “a safe, secure, reliable
source of energy to help fuel the everyday lives of Americans.”
Following the president’s rejection, TransCanada filed two lawsuits
to try to recoup its losses – one was a multibillion-dollar North American Free Trade Agreement (NAFTA) claim and the other a challenge to President Obama’s authority to reject the plan. TransCanada argued that
the U.S. Constitution gives Congress the power to regulate international
commerce and that Congress’ passage of the bill green-lighting the
construction of Keystone XL should have stood.
Mexico may
prove to be an easier alternative for the pipeline, but the rewards would be on a much
smaller scale. TransCanada currently has six projects in Mexico – two in operation, three under construction and another under development.
