WASHINGTON — Canada's hotly debated, long-delayed Keystone XL pipeline received its elusive U.S. presidential permit from Donald Trump on Friday, eight years and six months after the initial application for it to cross the American border.
The president made the announcement at the White House.
He was accompanied by the president of TransCanada Corp., the Calgary-based pipeline company that has wrestled with lawsuits, resistant landowners, protesters and Washington Democrats.
"You've been waiting for a long, long time," Trump said to TransCanada's Russ Girling.
A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota November 14, 2014. (Photo: Reuters/Andrew Cullen)
"It's a great day for American jobs and a historic moment for North America and energy independence. This announcement is part of a new era of American energy policy that will lower costs for American families, . . . reduce our dependence on foreign oil and create thousands of jobs."
That doesn't guarantee the pipeline gets built.
That's because the removal of one big obstacle in Washington hasn't done anything to eliminate other ones still sprinkled around the American Midwest, where opponents still hope to drown the project in protests and lawsuits.
The likely epicentre of the coming battle is Nebraska, the very place where opposition to Keystone began, years ago. TransCanada (TSX:TRP) must still reach deals with some landowners there, it lacks a state permit and faces possible court challenges there and in South Dakota.
"It's a great day for American jobs and a historic moment for North America and energy independence."
The markets demonstrated their skepticism by yawning at Friday's news: TransCanada's share value crept up barely one per cent, and hasn't increased from its October price before Trump was elected.
Keystone opponents swiftly linked their cause to the broader anti-Trump movement.
"This isn't game over, it's game on," Stephen Kretzmann, executive director of Oil Change International, said in a statement that insulted Trump.
"Now we have a president who is deeply beholden to the oil industry and will do anything they ask, so this approval is no surprise. . . . Put your tiny hands in the air, Trump, and back away from the climate."
"This isn't game over, it's game on."
Trump, meanwhile, has been eager to talk about projects like Keystone.
His young presidency has been consumed lately by problematic issues: an unpopular health reform and Russian election-meddling. Even as he made the Keystone announcement, reporters in the Oval Office shouted questions about the potential collapse of the health bill. At that very moment, networks were carrying a congressional committee announcement that Trump's former campaign manager would be questioned in its Russia probe.
Trump says he wants to move onto jobs and the economy.
Keystone XL would mean thousands of temporary construction jobs and a permanent, annual boost in tax revenues for communities along the route, which would stretch from Canada to an already completed southern portion now pumping oil to refineries on the Gulf of Mexico.
It's unclear if construction could start this year.
The Nebraska permit alone could take up to eight months, said Canada's Natural Resources Minister Jim Carr. He welcomed the U.S. announcement, but pointed out the process is far from over.
"We in Canada know that pipeline decisions can be controversial,'' Carr told reporters in Ottawa. "(But) you would assume that these approvals would lead to a completed pipeline project. We think this is a good day for the Canada-U.S. energy relationship."
"We in Canada know that pipeline decisions can be controversial."
He declined to say whether a completed Keystone would enter the calculus of whether the country needs another, larger project from TransCanada. Carr said the Energy East plan to move oil to the Atlantic Coast is undergoing an independent review.
U.S. regulators conducted their own, favourable reviews before politicians stepped in.
American government studies concluded that the pipeline would have negligible impact on the environment — and potentially even a beneficial one, as a cleaner alternative to oil transport by rail.
But opponents disputed the conclusion.
They pointed to the worst-case scenario calculated by U.S. regulators, and argued that it's actually becoming reality — that if oil prices remain low, and no other pipelines get built, Alberta oilsands expansion would slow, and emissions would drop, without Keystone.
Obama rejected project
Hearing this pressure from the political left, Barack Obama rejected the project.
In response, TransCanada filed a challenge under Chapter 11 of the North American Free Trade Agreement, alleging the U.S. government breached its legal commitments under NAFTA. That challenge has been dropped, TransCanada said Friday.
Republicans had repeatedly promised to reverse Obama's decision. That included Trump, who had often discussed the Keystone approval as a fait accompli, telegraphing intentions that the market received long ago.
"We believe that the receipt of the presidential permit was expected by the market," RBC Capital Markets said in a note to clients. "We note that KXL is not included in our valuation for the stock and if the project moves forward, we view that as upside."