TransCanada’s Keystone XL a step closer after Texas ruling
The controversial TransCanada's (TSX, NYSE: TRP) Keystone XL oil pipeline won a small battle Wednesday night as a Texas judge ruled in favour of the firm passing through a farm, after the owner had taken the Canadian company to court.
According to The Washington Post the verdict, which ensures TransCanada has eminent domain for the Keystone XL pipeline, removes one more obstacle for the $7-billion extension project allowing Canadian crude to flow to Texas Gulf refineries.
Despite Texas pro-oil culture, 'foreign' plans to pipe bitumen triggered a surprising rural uprising.
Farm manager Julia Trigg Crawford, from northeast Texas, was approached in 2011 by TransCanada’s representatives and offered money to allow for a segment of the pipeline to pass through her property.
She rejected the cash offer and looked to get a court to ruling against TransCanada's plans. Lawyers representing the farm accused the company of acting in bad faith and withholding key information about the project. They also argued that the Canadian firm did a "slipshod" study of the archaeological impacts, as the land contains artifacts from the Caddo Indians.
With yesterday’s decision, TransCanada can start building as soon as possible. And while permitting for the pipeline can take over a year, President Barack Obama promised in March to accelerate the process, saying that Keystone will relieve a supply bottleneck at Cushing, the pricing point for U.S. crude.
Canada exports 2 million barrels of oil per day to the U.S. and almost all of it ends up at Cushing where refining capacity is limited.
Alberta production is set to more than double to 3.7 million barrels by 2025 out of a total of 4.7 million. Production in the US particularly from the Bakken basin in North Dakota will see the country ramp up current output of 7.8 million barrels to 10.9 million barrels over the next few years.