Approval of the Keystone XL pipeline has passed the U.S. Congress, will head to the desk of President Obama
The Republican-led Congress passed legislation regarding TransCanada’s (ticker: TRP) Keystone XL pipeline. In a 270-152 vote, Congress decided to approve the pipeline which has been on hold for more than six years.
The bill will now make its way to the Executive Office where President Obama will decide whether or not to veto the legislation. The White House has said several times that it will veto any legislation regarding Keystone that the Executive Office feels tries to circumvent the State Department. The State Department has been reviewing the pipeline for more than six years in order to decide whether or not the project is in the best interest of the nation. The legislation passed by Congress would approve the pipeline immediately, without the need of the State Department’s approval.
Increasing tensions
The new Republican Congress’ focus on energy and jobs bills has put Keystone at the front of ever-increasing tensions between the Executive and Legislative branches of the government. President Obama initially said that his concern regarding the bill centered on how the pipeline would affect the environment, and the Environmental Protection Agency (EPA) recently suggested reexamining the project’s impact in the lower oil price environment.
The EPA received criticism after saying this week that the U.S. government should consider the recent trend of lower oil prices as part of its decision on whether or not to approve the Keystone pipeline. The EPA believes that lower prices may encourage greater oil sands production, thus causing a greater impact on the environment than the State Department initially estimated, reports the Wall Street Journal.
The letter said the 2014 environmental assessment had concluded that sustained oil prices of $65 to $75 per barrel would cause the pipeline to “change the economics of oil sands development and result in increased oil sands production, and the accompanying greenhouse gas emissions, over what would otherwise occur.”
In two separate letters sent this week, both TransCanada and the Canadian Ambassador to the U.S., Gary Doer, criticized the agency’s comments.
“We don’t believe any single pipeline causes production of oil to accelerate,” said Russ Girling, CEO of TransCanada. Mr. Doer’s letter was more critical, saying, “One is left with the conclusion that there has been significant distortion and omission to arrive at the EPA’s conclusion.”
A spokesperson for the Canadian Embassy in Washington said the letters were not coordinated.
Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.
