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Keystone XL's Southern Leg To Be Operational On Jan. 3: TransCanada

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KEYSTONE XL TAR SANDS EXPANSION
A sixty-foot section of pipe is lowered into a trench during construction of the Gulf Coast Project pipeline in Prague, Oklahoma, U.S., on Monday, March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas. | Bloomberg via Getty Images

The Obama administration has yet to approve the main leg of the contentious Keystone XL pipeline, but that won’t stop TransCanada from opening the southern leg of the pipeline next month.

The company filed papers with the U.S. Federal Energy Regulatory Commission on Monday stating it plans to start the pipeline on Jan. 3, Reuters reports. It will move oil from a terminal in Cushing, Okla., to the Gulf Coast at Port Arthur, Tex.

Unlike the main part of the pipeline, the southern leg crosses no international boundaries, so it doesn’t require the U.S. State Department’s approval.

And TransCanada can operate the pipeline independently of the northern leg. There has been an oil glut at the Cushing terminal, and the pipeline will help to relieve that, moving U.S. oil to coastal ports and giving it access to global markets.

Oil prices jumped as much as 2.4 per cent on the news, Bloomberg reported.

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The northern leg of the pipeline — the part that would bring oil sands product from Alberta to Cushing — is still in limbo.

U.S. oil production has been booming, thanks to new methods of oil extraction in North Dakota and Texas, and that makes the U.S.’s approval of the main leg of Keystone XL less likely, according to a memo prepared for Canada’s ambassador to the U.S. and obtained by the Globe and Mail.

Paul Connors, the Canadian government’s top energy expert in Washington, said in a memo to Ambassador Gary Doer that the U.S.’s oil boom reduces the pressure on the Obama administration to approve Keystone XL, especially in light of the fact that the light oil produced in North Dakota and Texas is less carbon-intensive than oil sands product.

TransCanada, for its part, continues to fight the publicity battle for Keystone XL. The company’s CEO, Russ Girling, recently rejected an invitation from U.S. billionaire Tom Steyer to attend a conference on the pipeline this week.

Steyer, one of the pipeline’s most vocal opponents, put on a conference Monday titled “Can Keystone Pass the President’s Climate Test?”

“We won’t support in any way this gentleman’s political grandstanding as he builds his profile to make a run for office,” TransCanada spokesman James Millar said, as quoted by The Canadian Press.

“He wants to keep Americans from working and providing for their families by stopping Keystone XL.”

At the conference Monday, Steyer said that Keystone fails the president’s test for approval.

President Obama this summer said he would approve Keystone only if it “doesn’t significantly exacerbate the problem of carbon pollution.”

A State Dept. report from this spring said the pipeline would have little impact on carbon emissions, as the oil would make it to market with or without Keystone.

Environmentalists disagree, pointing to studies showing that rejecting Keystone would reduce oil sands growth, and the emissions caused by it.

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