Crude oil now flows through the southern leg of the Keystone XL pipeline, but the northern leg still awaits a presidential permit and TransCanada executives say the costs of delay are piling up.
TransCanada President Russ Girling expressed frustration with the now five-year permit process, which he says comes down to a simple question.
“The real question is: where do the United States want to get their oil from and how do they want to get it transported?”
Girling held a news conference on the opening of the southern portion of the Keystone XL pipeline, the $2.3 billion portion that runs from Cushing, OK to oil refineries along the Gulf Coast in Texas.
Even as TransCanada highlighted the completion of that portion, questions remain about whether the northern portion of Keystone XL, which would run through Nebraska, will ever be built.
President Barack Obama has yet to make a decision on whether to grant TransCanada a permit to cross the border and build the pipeline which would carry crude oil produced from oil sands (also known as tar sands) from northern Alberta to the Gulf.
The delay prompted TransCanada to break the $7 billion project into two sections.
At least, it used to be tagged as a $7 billion project.
While the southern portion cost $2.3 billion to build, the northern portion will almost certainly exceed its projected $5.4 billion cost.
Girling said TransCanada and its customers have agreed to share the cost of delay; costs such as maintaining the integrity of the pipe as well as the pumps purchased, but sitting idle.
Environmental and industrial studies of Keystone XL take up 15,000 pages. There have been four federal environmental reviews. More than 100 public hearings have been held, including some very high-profile hearings in Nebraska that changed the route through our state, adding to the cost.
Five years after its proposal, the only movement on Keystone XL is the ratcheting up of rhetoric from both sides. One declares its job potential. The other decries its potential to damage the environment.
Girling says 9,000 construction jobs hang on the decision, a decision that seems no closer now than it did five years ago.
“We all recognize it is what it is and we have to soldier through it,” Girling said, “but I can tell you that there’s nobody happy in the value chain about the delays and the cost of the delays.”
AUDIO: Brent Martin reports [:45]