06/30/2015 02:36 EDT | Updated 06/30/2016 05:59 EDT

TransCanada: Tougher New Carbon Rules Mean U.S. Should OK Keystone XL Pipeline


CALGARY - TransCanada says recent Canadian climate change announcements should bolster the case in Washington for building its long-delayed Keystone XL pipeline.

The Calgary-based company makes that argument in a letter to Secretary of State John Kerry and other American officials as the U.S. regulatory process nears its seventh anniversary.

In the missive, executive vice-president and general counsel Kristine Delkus points to recent climate policy announcements by both the federal and Alberta governments.

In May, Ottawa announced it aims to cut Canada's greenhouse gas emissions by 30 per cent below 2005 levels by 2030, though no mention was made of the oilsands crude that Keystone XL would ship.

And last week, Alberta's new NDP government said it would ratchet up emission reduction targets for large industrial emitters and double its carbon price for those that exceed their allotment.

U.S. President Barack Obama has said Keystone XL would only be in the U.S. national interest if it didn't significantly worsen climate change.

"We are asking the U.S. State Department to consider these recent developments that add to the abundance of evidence already collected through seven years and 17,000 pages of review that Keystone XL will not 'significantly exacerbate' greenhouse gas emissions," Alex Pourbaix, TransCanada's president of development, said in a statement.

The letter also notes the CEOs of some of the biggest oilsands players have come out in favour of tougher carbon pricing, including Suncor Energy (TSX:SU) and Cenovus Energy (TSX:CVE), along with big European firms with Canadian operations, like Royal Dutch Shell and Total.

As well, TransCanada (TSX:TRP) reiterated that it expects the oilsands — derided in many quarters for their big carbon footprint — to be developed regardless of Keystone XL, meaning the pipeline alone should not enable higher emissions.

Alberta Premier Rachel Notley has said she wouldn't stump for Keystone XL south of the border like her Progressive Conservative predecessors frequently did. She's said she'd rather see the oilsands bitumen upgraded in Alberta rather than shipped raw to Texas

She's also said she won't advocate for Enbridge's (TSX:ENB) proposed Northern Gateway oilsands pipeline to the West Coast.

But Notley has taken a warmer tone when it comes to TransCanada's Energy East pipeline to the East Coast and Kinder Morgan's expanded Trans Mountain expansion to the Vancouver area.

The State Department is responsible for weighing Keystone XL because it crosses the Canada-U.S. border. It then makes a recommendation to Obama, who has the final say.

Keystone XL would cut diagonally from the Saskatchewan-Montana border to southern Nebraska, enabling more oilsands more crude to flow to refineries on the U.S. Gulf Coast by connecting to TransCanada's existing network.

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