By Ernest Scheyder
HOUSTON, March 4 The controversial Keystone XL
pipeline will receive President Obama's blessing and be built to
transport crude oil from Canada to Texas, TransCanada Corp
Chief Executive Russ Girling predicted on Tuesday.
Girling's confidence helps project a sense of inevitability
around the $5.4 billion project, which supporters say would
create badly needed jobs, and offset a recent unfavorable
Nebraska court ruling and more than five years of political
wrangling in Washington.
"It is the next pipeline that is going to be built" in the
United States, Girling said in an interview at the IHS CERAWeek
energy conference in Houston. "The marketplace continues to push
us to build a pipeline. It's the right thing to do."
Girling sought to reassure many of the Canadian company's
customers attending the conference, the largest gathering of
energy companies in the world, that Keystone XL ultimately would
open and be able to transport their crude oil to Texas
The project has become a lightning rod for opposition, with
environmentalists saying oil spills would become common along
the Keystone XL route and warning that the project could hasten
Still, the U.S. State Department issued a report in January
that downplayed environmental concerns surrounding Keystone XL,
rankling opponents and buoying supporters of the project.
The project's delay has perplexed some in Canada, where
government officials have urged Obama to give his consent to
TransCanada, the second-largest Canadian pipeline operator.
"We hope to see a resolution soon," Joe Oliver, Canada's
minister of natural resources, said in an interview on Tuesday.
"We hope it's a positive outcome."
President Obama told U.S. governors last month that he
expects to make a decision on whether to approve TransCanada's
Keystone plans in the next few months, a step that would end the
"There's no reason in my mind why it can't come to a
conclusion," Girling said.
The project hit a snag last month when a Nebraska judge
ruled the state's governor lacked authority to approve part of
the project. Girling said he believes that ruling is a "solvable
problem" and won't affect Obama's process for reaching a final
decision on Keystone XL.
The Keystone pipeline network was designed in four phases,
three of which have been built already, and TransCanada began
shipping Canadian crude oil to Texas in January.
The Keystone XL portion of the network, roughly 800 miles
through Montana, South Dakota and Nebraska, would increase
capacity and allow Bakken crude oil from North Dakota and
Montana to be shipped on the network.
While waiting for approval, TransCanada would be open to
building railcar loading hubs for crude oil, depending on
customer needs, Girling said.
Hubs to load and transport oil via train have become a
popular second option in the energy industry as pipeline
projects have encountered regulatory delays. TransCanada rival
Enbridge has built its own network of rail hubs to
service areas with limited pipeline capacity.
TransCanada already has a series of crude oil storage
facilities in Texas, Oklahoma, Illinois and Alberta, and
building loading hubs at each location to connect with rail
lines could let it get crude oil to markets faster as it waits
for regulatory approvals.
"If we need to bridge the gap between growing production and
the time we bring pipelines online, we'll definitely do that,"
he said. "We've had conversations with our customers and
railroads about making those kinds of things work out."
No plans have been made yet to build such hubs, though,