State Department could issue its final impact statement within weeks
TransCanada Corp. (TSX: T.TRP
) was hoping to launch Keystone XL during the second half of 2015, but the company is now conceding that this will be challenging given the pace of the approval process, which is still waiting on a final environmental impact statement from the U.S. State Department.
According to Bloomberg
, the State Department could issue its final impact statement within weeks, but after that there will be a 90-day review of the project to determine whether it is in national interests.
TransCanada is hoping that it will see approval before the end of the year. But even in this best-case scenario, the target launch date for construction in mid-2015 will be difficult to meet. TransCanada will require 24 months for construction of the pipeline.
Meanwhile, U.S. investors are getting rid of shares in oilsands companies like Canadian giant Suncor Energy Inc. (SU)—which has fallen over 8% in three years--because there aren’t enough pipelines to deliver, which has in turn has depressed Canadian crude prices, according to Bloomberg.
As the process for approving Keystone XL nears the finish line, a number of issues are gaining momentum—not least speculation that Keystone’s approval would cause a spike in U.S. gas prices--and the Quebec train crash doesn’t help TransCanada’s case.
A new report by the non-profit Consumer Watchdog
says that if $5.3 billion Keystone XL is built, gas prices in some parts of the country could rise by as much as 40 cents per gallon. The rationale is that because oil extracted in Canada would bypass traditional U.S. markets by going through the pipeline to the Gulf Coast and then to tanker ships diverted to international markets where it will be old for higher prices.