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TransCanada Corp. has written to U.S. Secretary of State John Kerry arguing that new Canadian rules on emissions should persuade him to approve the construction of the much-delayed Keystone XL pipeline.

The proposed US $6.4 billion project would carry an estimated 830,000 barrels of Canadian crude oil per day from Hardisty, Alberta, to Steele City, Nebraska, then link up with Keystone鈥檚 existing line, which would take the oil on the final leg to the Texas coast of the Gulf of Mexico.

Keystone XL is strongly opposed by environmentalists both in the United States and Canada, and President Obama says he won鈥檛 approve the project until he鈥檚 convinced it won鈥檛 seriously contribute to climate change. (Related:聽Criminal Charges Filed In Lac-Megantic Oil Train Disaster)

But in a letter to Kerry and other State Department officials, Kristin Delkus, TransCanada鈥檚 general counsel, pointed to new policies on carbon emissions in Canada, specifically a federal rule issued in May to cut emissions down to 70 percent of their 2005 levels within 15 years.

Further, Delkus wrote, Canada鈥檚 federal government also has joined other members of the Group of Seven industrial nations to reduce reliance on fossil fuels by between 40 percent and 70 percent by 2050.

Delkus, who also serves as TransCanada鈥檚 executive vice president, also cited a new rule imposed by Alberta鈥檚 provincial government run by the reformist New Democratic Party that will double the penalties for exceeding carbon emissions allotments to US$24 per metric ton by 2017.
鈥淎ny decision on the pending Presidential Permit application should take all of these factors and developments into account,鈥� Delkus wrote. (Related:聽Brazil A Victim Of Oil Prices And Its Own Hype)

The letter also argues that the chiefs of some of the biggest companies involved in Alberta鈥檚 oil sands industry have publicly come out in favor of such stricter carbon pricing. Delkus said they include Suncor Energy and Cenovus Energy, both Canadian concerns, as well as European giants with operations in Canada, including Total of France and the Anglo-Dutch company Royal Dutch Shell.

The TransCanada letter also reminded Kerry that the oil sands of Alberta will be developed regardless of any U.S. government opposition to the pipeline project. Therefore, it argued, not building Keystone XL would have no effect on controlling CO2 emissions overall.

In an effort to bolster Delkus鈥� letter, Alex Pourbaix, TransCanada鈥檚 president of development, issued a separate statement urging Kerry鈥檚 agency to approve the pipeline. (Related:聽How Greece Crisis Could Drag Oil Prices Down)

鈥淲e are asking the U.S. State Department to consider these recent developments that add to the abundance of evidence already collected through seven years and 17,000 pages of review that Keystone XL will not 鈥榮ignificantly exacerbate鈥� greenhouse gas emissions,鈥� Pourbaix wrote, quoting Obama.

And in concluding her letter, Delkus wrote, 鈥淐learly the developments with respect to Canadian, Alberta, North American, and international [greenhouse gas] policy, as well as recent industry positions and technological developments, are all consistent with the [U.S.] president鈥檚 stance on not exacerbating the risk of climate change, as is TransCanada鈥檚 own clean energy footprint.鈥�

In February, the U.S. Congress passed legislation supporting the construction of Keystone XL, but Obama responded with a veto. Since then, one of Kerry鈥檚 jobs is to review final opinions on the pipeline project and send the president his recommendation on whether or not to allow it. The secretary faces no deadline, however.

By Andy Tully of Oilprice.com

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Original story: http://oilprice.com/Latest-Energy-News/World-News/Canadas-Carbon-Emissions-Rules-Sparks-Hopes-For-Keystone.html

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