The developer behind Keystone XL Pipeline will make a final decision about the future of the multi-billion oil project in December, the company said Friday.
TransCanada’s timeline is the first time that the Canadian company has ever publicly expressed a deadline for the fate of the beleaguered pipeline. Company officials must weigh the regulatory hurdles and changing economics before they move forward on the $8 billion project.
The company’s decision will be based on the outcome from a regulatory agency Nebraska, Paul Miller, the company’s executive vice president, said in a conference call after the release of quarterly results, which were better than expected.
Keystone is expected to carry 830,000 barrels of oil a day from Canada to Gulf Coast refineries, and with crude at $53 per barrel, potentially yield taxpayers $1.6 billion a year.
“Our assessment of these factors will really drive our investment decision when we get into that November-December time frame,” he said. Much of the decision hinges on what elected officials on the Nebraska Public Service Commission decide about various aspects of the pipeline route in Nebraska.
Activists have been pressuring the commission to reject the project. Commission members engaged in a grueling 10-hour meeting earlier this year with more than 120 activists and ranchers over the controversial pipeline.
The group, consisting of four Republicans and one Democrat, will determine whether the Canadian project moves ahead. They meet again in August to make a final assessment.
TransCanada has “good support” from current companies, but the company is seeking new investors and entrants willing to forge a “significant” level of commitment, Miller added. One of the reasons for trepidation is the change in the economy over the last 10 years.
Oil prices today are lower today than they were in 2009 when the pipeline was proposed. Prices hovered around $130 a barrel at the time, which meant that demand from oil producers and refineries for the pipeline was high. A barrel of oil today sells for about $45.
President Donald Trump resuscitated the pipeline in February, signing an executive order overturning the Obama administration’s decision to scuttle Keystone. Former President Barack Obama believed the project could undercut the U.S.’s mission to reduce greenhouse gasses from fossil fuel production.
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