Did The Last Anti-Keystone Argument Just Bite The Dust?
With the State Department’s release of a report Friday concluding the Keystone XL pipeline would not substantially worsen carbon pollution, the Obama administration apparently had one less reason for not approving the project.
Last summer, the President said he would approve the 1,700-mile pipeline if it would not “significantly exacerbate” the problem of greenhouse gas emissions. The State Department’s report seemed to suggest a pro-completion answer to that problem.
Moreover, the report also appeared to indicate that if the pipeline were not built, the oil would still be extracted and transported by rail.
Secretary of State John Kerry has the responsibility to make a recommendation to President Obama about whether to go forward with the project. Kerry has never publicly stated his views on the pipeline, although it is widely known that he hopes to make progress on climate change part of his legacy.
The matter is not settled. The final report concluded that the proposed XL pipeline would not worsen carbon pollution, however, some environmentalists disputed its objectivity. They claimed some consultants hired by the firm that wrote an earlier draft report had worked for TransCanada, the company seeking to build the pipeline.
Many Republicans and oil industry executives support the project saying it would create jobs and increase oil supplies from a nearby, friendly source, thereby further reducing America’s dependence on Middle Eastern oil.
Cindy Schild of the American Petroleum Institute told The New York Times “After five years and five environmental reviews, time and time again the Department of State analysis has shown that the pipeline is safe for the environment.”
If the recently released State Department report resulted in completion of the XL portion of the pipeline, among the big winners, first of all, would be the company set to build it, TransCanada (NYSE: TRP).
TransCanada’s CEO, Russ Girling, in a statement Friday said, “The environmental analysis of Keystone XL released today once again supports the science that this pipeline would have minimal impact on the environment. The next step is making a decision on a Presidential Permit for Keystone XL. I believe that this project continues to be in the national interest of the United States for two main reasons: supporting U.S. energy security and the thousands of jobs our multi-billion dollar project will create.”
Another potential winner includes Valero Energy (NYSE: VLO) which, MSN Money said, had an option to acquire up to 15 percent of the pipeline. In addition, many of Valero’s refineries are capable of handling the heavy oil sand crude that would flow from Alberta to the U.S.
MSN Money also named Suncor and Exxon Mobil as potential beneficiaries of a completed pipeline. A final decision could come as early as spring.
At the time of this writing, Jim Probasco had no position in any mentioned securities.
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