CALGARY — A fresh setback for the controversial and often-delayed Keystone XL pipeline is “frustrating” for Canada’s oil and gas industry, though builder TC Energy Corp. says work will continue in Canada.
The U.S. Court of Appeals for the 9th Circuit decided not to overturn a ruling from a lower court on Thursday that cancelled a national environmental permit that TC Energy needs to build Keystone XL across waterways in the United States.
TC Energy and the U.S. Army Corps of Engineers had asked the California-based 9th Circuit court to overturn the lower court’s decision, which was issued April 15, and is now expected to result in some work delays for the company in the U.S.
“While we are taking some time to review impacts to our 2020 U.S. construction scope, the ruling does not impact our plans for Canada, where work is getting underway for both pipeline and facilities construction,” TC Energy spokesperson Tery Cunha said in an email.
Asked whether or not TC Energy would appeal the Ninth Circuit decision, Cunha said the company is “evaluating our options and our next steps to continue advancing the project.”
Cunha did not say whether work could continue in the United States in areas without waterways — an issue that’s still an open question for Canadian oil producers interested in seeing the project proceed.
“It’s frustrating, obviously, but I think compared to other situations this is more of a minor setback and I think it will get resolved,” said Tristan Goodman, president of the Explorers and Producers Association of Canada, which represents small- to mid-sized oil and gas producers.
The industry was anticipating this delay to Keystone XL and expects pipelines to be hotly contested and take longer to build given concerns about the environment.
“This is just a new state of how the business is undertaken. We move forward and we can’t get discouraged,” Goodman said. “The problem is, it doesn’t mean it’s going to be easy. There are legitimate societal expectations that have to be met and continue to develop. That’s where the industry needs to move to.”
TC Energy first proposed the Keystone XL pipeline in 2008 to move 830,000 barrels of oil per day from Alberta to the U.S. Gulf Coast, where Texas and Louisiana refineries can process barrels of heavy oil. After multiple delays, the cost of the pipeline has climbed and now sits at US$14.4 billion.
With a file from Reuters