US President Donald Trump has issued a permit to TransCanada (TSX, NYSE:TRP) to build its long-delayed Keystone XL pipeline, which will carry more than one-fifth of Canadian oil exports from Alberta to Texas.
White House press secretary Sean Spicer tweeted that President Trump would discuss the pipeline later on Friday morning.
Former President Barack Obama rejected the project in late 2015, saying it would not have made a meaningful long-term contribution to the US economy. He also believed it would have dented his administration’s efforts to seal a global climate change deal, key to his environmental legacy.
TransCanada has already spent at least $2.5bn on the project, whose total cost once built would be about $10bn due to delays and permitting costs.
But as Trump signed in January an executive order that paved the way to today’s approval, he said Keystone XL would create about 28,000 jobs. The figure, however, has been questioned as TransCanada itself predicts only 13,000 temporary construction jobs, with the US State Department saying only 50 of them will be permanent positions, The Independent reports.
The Calgary-based firm first applied for a permit in 2008 seeking to build the 1,897km (1,179-mile) pipeline, which would carry 800,000 barrels of crude a day from Alberta to Steele City, in Nebraska. There it could join an existing pipeline.
The company has spent at least $2.5 billion on the project, whose total cost once built would be more than $10 billion due to delays and permitting costs.
Trump’s move is one of the first concrete measures he has taken to reverse his predecessor’s environmental rules in favour of boosting the country’s oil, gas and coal sectors, which has suffered in the past years due to low prices and increased competition from alternative energy sources, as well as legislation to curb carbon emissions.
Investors reacted positively to the news. The stock was trading 1.12% higher to Cdn$62.45 in Toronto at 9:43am ET, while it was up 1.03% in New York to $46.71 at 9:58am ET.
Keystone XL Pipeline — Overall route map. (Courtesy of TransCanada)
