Keystone XL pipeline: A 'Canada First' energy plan?
By Ethan Lou
CALGARY, Alberta (Reuters) - U.S. President Donald Trump's move this week to revive the Keystone XL oil pipeline marked a major step under his "America First" energy plan to boost U.S. drillers and create new U.S. jobs. But the project's biggest winners may be Canadian.
If built, TransCanada’s Keystone XL from Alberta to Nebraska would yield about $2.4 billion (C$3.2 billion) a year for Canada, split between government revenues, shareholder profits and re-investment into the still-recovering Canadian oil patch, according to a Conference Board of Canada research note prepared for Reuters on Thursday.
That’s because the 800,000 barrels-per-day (bdp) line would provide cheaper shipping and a new outlet for the country’s vast but landlocked oil sands reserves, giving them increased access to the stronger U.S. market. Canadian producers could likely command around $2 more per barrel, analysts and investors said.
For the United States, where environmental opposition to the pipeline had led to its temporary demise under former President Barack Obama, there are also economic advantages. But it is unclear how they compare to Canada’s.
Trump has said the project would create 28,000 jobs in the United States and pledged to use American steel for the pipe.
But a 2014 State Department study predicted just 3,900 construction jobs and 35 permanent jobs. And steelmakers and analysts say TransCanada’s stringent raw materials requirements may disqualify most U.S.-based manufacturers.
Trump's invitation for TransCanada to reapply for Keystone XL, in an executive order signed on Tuesday, was welcomed by TransCanada shareholders, the Canadian energy industry and both the opposition Conservatives and governing Liberals.
"This pipeline provides a more efficient means to supply our customers in the U.S.," said Sneh Seetal, spokeswoman for Suncor Energy Inc (SU.TO: Quote), Canada's largest oil and gas company. Continued...