TransCanada Sees ‘Arm’s-Length’ Pipeline Review by Kerry, Obama

Russell "Russ" Girling, president and chief executive officer of TransCanada Corp., right, speaks with workers during a media event at the TransCanada Corp. Houston Lateral Project pipe yard in Mont Belvieu, Texas, on March 5, 2014.

Photograph by Scott Dalton/Bloomberg

Russell “Russ” Girling, president and chief executive officer of TransCanada Corp., right, speaks with workers during a media event at the TransCanada Corp. Houston Lateral Project pipe yard in Mont Belvieu, Texas, on March 5, 2014.

After more than five years, President Barack Obama’s administration has yet to decide on TransCanada Corp.’s proposed Keystone XL oil pipeline, with the State Department weighing U.S. approval.

In all that time, company Chief Executive Officer Russ Girling says he’s never personally spoken with Obama, Secretary of State John Kerry or his predecessor, Hillary Clinton, about the $5.4 billion project.

“I think their view has been that this is an arm’s-length process,” he said during an interview today in Washington. The review “is being managed by the Department of State at the working level, and then when the Department of State is finished and it has the recommendation, they’ll engage in the process.”

The company is part of the government’s consultation process. Yet is also has requested meetings with senior advisers to Obama, though not with Kerry or the president himself, TransCanada spokesman James Millar said in an e-mail. They also sought to meet with Clinton when she led the department.

White House visitor records show that Girling met twice in 2012 with Heather Zichal, a former adviser to Obama on energy and climate change. A third visit, in July, was canceled. State Department officials didn’t immediately respond to requests for comment.

Calgary-based TransCanada is seeking U.S. approval to build the pipeline to transport crude from Alberta’s oil sands to refineries on the Gulf of Mexico coast. Because the conduit crosses an international border, the State Department must approve it. The agency on April 18 put that decision on hold, citing a pending legal challenge to the pipeline’s route in Nebraska.

Regular contact between an applicant and State is a component of the presidential permit application review process, a State Department spokesman says..

State says reviews take into account many factors including energy security, environmental, cultural and economic impacts as well as foreign policy, compliance with state and federal regulations and more. The ultimate question is whether the project is in “the national interest of the United States. ”

Environmental groups have fought the pipeline, and TransCanada is now considering shipping the oil by rail.

Girling said TransCanada doesn’t envision a scenario in which it would pull out of the U.S. review process, even though costs have risen and the company has already dumped $2.3 billion into the pipeline’s construction.

“We have a fully sold-out pipeline, and we have a waiting list of customers who want to get access to it,” he said. “As long as there continues to be demand for the pipe, then we will continue to press for approval.”

And that $5.4 billion estimate? It’s much higher now, though Girling won’t say by how much.

“There’s no sense throwing out a number every few months because we’re not through the end of the process yet, but it will be materially higher than $5.4 billion,” he said. “This is going to cost a heckuva lot more.”

 

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