Last Leg of Keystone Pipeline May Go Ahead

TransCanada Pipelines told its investors yesterday that a critical leg of the XL Keystone Pipeline could be completed in 2012.   The plan would have to be run by the U.S. State Department.  TransCanada hopes that this portion of the pipeline could be approved, prior to approving the complete process.

Most of North America's crude now runs into a hub at Cushing, OK and the hub has been unable to keep up with the demand.  Enbridge has already announced that it will acquire 50% of the Seaway Pipeline at a cost of $1.1 Billion.  It's intention is then to reverse the flow to Texas. 

Alex Pourbaix, TransCanada's president of energy and oil pipelines, said the company is focusing on getting as much crude as possible to Gulf coast.
"The first thing that we need to do is spend a little bit of time with our shippers and see sort of where they stand," he said.
"Certainly the message we're hearing is that they would very much like to see that Cushing-to-Gulf Coast phase come in as soon as possible. So we'll take a very hard look at the commercial underpinnings for that."  CBC

The  XL Keystone Pipeline decision, which was due this year has been delayed for at least 12 to 18 months, pushing the decision past the 2012 Presidential election. 

The fact that there is a glut of oil accumulating at Cushing, OK is evidence that oil from the Alberta Oil Sands is making it to the United States and is actually creating a bottleneck at Cushing, OK.  Obviously the oil companies and pipeliners would like to ship as much oil as possible to Texas. 

It should be interesting, when and if TransCanadaCorp decides to go ahead with the last leg, what the Obama Administrations reaction will be.   The President has been accused of politicizing the decision, giving in to his environmental left base.  The delay was over the Aquafer in Nebraska, an obstacle that was already removed by the Nebraska legislature, which said it wants to alter the route in its state.  The State Departments' response has been that no decision would be made for at least 13 months. 

Will there also be an obstacle to the Cushing/Texas leg?