A Canadian company announced Monday it plans to proceed with pipeline from Cushing to the Gulf Coast, a project that will not require presidential approval.
Oklahoma political leaders including Gov. Mary Fallin, R-Oklahoma City, Lt. Gov. Todd Lamb, R-Edmond, and Senate Pro Tem Brian Bingman, R-Sapulpa, were quick to react positively to the news, issuing statements about the development.
Keystone XL is a $7 billion 1,661-mile, 36-inch crude oil pipeline that would begin at Hardisty, Alberta, and extend southeast through Saskatchewan, Montana, South Dakota and Nebraska, according to the company.
It would incorporate a portion of the Keystone Pipeline (Phase II) through Nebraska and Kansas to serve markets at Cushing before continuing through Oklahoma to a delivery point near existing terminals in Nederland, Texas, to serve the Gulf Coast marketplace.
On Jan. 18, President Barack Obama said via a statement the denial of the permit was not based on the merits of the pipeline but rather on an imposed 60-day legislative timeline for a decision.
On Monday, TransCanada informed the State Department the Cushing to the Gulf portion of the project has its own independent value and it will be built as a stand-alone project. It would not be part of the presidential permit process, according to the company.
TransCanada President and CEO Russ Girling said the project will transport growing supplies of U.S. crude oil to meet refinery demands in Texas. Coastal refineries can then access lower cost domestic production and avoid paying a premium to foreign oil producers, Girling said.
The company stated that it has negotiated more than 99 percent of voluntarily easements in Texas and close to 100 percent in Oklahoma. Easements make up the route of a pipeline and are similar to an easement for water, sewer and utility lines. Residents maintain ownership of the land and landowners receive a payment equal to or greater than the land’s market value.
In a fact sheet on benefits to states, TransCanada says Oklahoma’s economy will see $1.2 billion in new spending, an increase in personal income, additional state and local tax revenues of more than $25 million and more than $1 billion in increased gross state product.
Subject to regulatory approvals, TransCanada anticipates the Cushing to the Gulf Coast project to be in service in mid- to late 2013.
Fallin said linking Cushing to Gulf Coast markets will provide an immediate economic jolt to the state and be a long-term boost to its energy sector. Fallin said it will create 1,200 jobs here and increase access to coastal markets, helping energy producers for years to come.
The pipeline is exactly the type of shovel-ready project the president should support, Fallin said.
“Furthermore, the substantial upgrade to our energy infrastructure would help bolster the production of North American energy and wean the United States off its dependence on hostile oil regimes overseas,” Fallin said.
Lamb, like the other GOP leaders, praised the efforts of TransCanada. Lamb said Oklahoma’s economy is driven by the oil and gas industry, which will be even stronger with this development.
Lamb, a small business advocate, said as a result of this pipeline, Oklahoma will see more construction jobs, more industry jobs and more economic activity across the state.
“I support the construction of this pipeline not only due to economic or commercial reasons, but also because of my past experience in homeland security,” said Lamb, who served in a variety of roles with the U.S. Secret Service as a special agent. “This project will strengthen our national security and energy security.”
Another local supporter of the project is U.S. Rep. James Lankford, R-Edmond.
TransCanada also plans to reapply for a presidential cross-border permit for the Keystone XL project from the U.S-Canada border in Montana to Steele City, Neb. Several sections of Keystone pipeline are already operational in the U.S.
Opponents of the project include members of the Sierra Club. In a Jan. 11 press release, the Oklahoma chapter stated the oil industry is pulling a “bait and switch scam,” offering the pipeline as a path to economic and national security when it is mostly meant for export.
Oklahoma Chapter of the Sierra Club Director David Ocamb said it is not a “jobs vs. the environment” issue.
“This is about pollution vs. the environment,” he said.
In a TransCanada fact sheet disputing “myths,” it states the crude oil transported in the pipeline will not be shipped to China, but be refined at U.S. refineries on the Gulf Coast to meet American demand for petroleum products.
The Oklahoma Chapter of the Sierra Club claims economic benefits on job creation are greatly exaggerated.
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