TransCanada Corp. (TRP) Chief Executive Officer Russ Girling said the timeline for U.S. approval of the $5.3 billion Keystone XL pipeline project will make the start of operations in the second half of 2015 “difficult.”
The CEO said a final environmental impact statement from the State Department may come in “weeks, not months,” after which there will be a 90-day review of whether the project is in the U.S. national interest. “I hope a decision can be made this year,” Girling said today in an interview at Bloomberg headquarters in New York.
If approved, Calgary-based TransCanada needs 24 months to build the pipeline, which would connect oil production from Alberta to refineries on the U.S. Gulf Coast. President Barack Obama initially rejected the project in January 2012, citing concerns with its path through ecologically sensitive lands in Nebraska. The company reapplied with a new Nebraska route last year and split the project in two, building the southern portion that doesn’t require a permit first.
Environmentalists oppose the project because of the potential for oil spills along its more than 2,000-mile (3,200 kilometer) route. Some opponents are also blocking it because it will transport crude from Alberta’s oil-sands projects, which generate more greenhouse gases than most conventional production.
“Keystone is not the driver of whether Canadian oil sands will be produced,” Girling said. “They will be produced anyway.”
In September, the project will reach its sixth anniversary from the initial application date, Girling said. The company in April bumped back its target to complete the line to the second half of 2015, forecasting costs will rise amid delays receiving the needed approvals for construction.
TransCanada continues to incur costs to store the equipment it has already purchased and to maintain the pipe, in some ca