WASHINGTON — TransCanada announced Monday it will build the Keystone XL pipeline segment connecting the crude oil supply hub in Cushing to the Texas Gulf Coast, as the company reapplies for a federal cross-border permit to move oil from Alberta, Canada, into the United States.
The company said the $2.3 billion segment from Cushing to Texas will be built as the Gulf Coast Project and should be in service by the middle of next year if federal approvals are granted.
White House spokesman Jay Carney said Monday that the administration will make sure federal permitting is acted on “very quickly.” Gov. Mary Fallin said she spoke Monday with a TransCanada official who told her that the project was ready to begin in Oklahoma as soon as the permits are obtained.
“They told me they are shovel-ready,” Fallin said in an interview. She said the construction work would employ more than 1,000 people and that most are expected to be Oklahomans.
But an environmental group that has opposed the Keystone XL pipeline vowed to block any segment from being built.
The announcement from TransCanada had been expected, since company officials have been publicly talking about moving forward with the Oklahoma-Texas segment.
“The Gulf Coast Project will transport growing supplies of U.S. crude oil to meet refinery demand in Texas,” said Russ Girling, TransCanada's president and chief executive officer, in a news release.
“Gulf Coast refineries can then access lower cost domestic production and avoid paying a premium to foreign oil producers. This would reduce the United States' dependence on foreign crude and allow Americans to use more of the crude oil produced in their own country.”
TransCanada's application for a cross-border permit was denied by President Barack Obama last month after the U.S. State Department determined the application was incomplete because no route through Nebraska had been determined.
However, the president said at the time of the rejection that the administration would look for ways to develop the Cushing-to-Gulf of Mexico pipeline.
Carney said Monday that Obama welcomed the TransCanada decision, which will not require State Department approval.
Fallin, who went to the White House on Monday with other governors in Washington for a national conference, said she spoke directly to Obama about the Oklahoma-Texas segment and thanked him for his comments in support of it.
“He said, ‘We're all for that,'” Fallin said.
Carney, the White House press secretary, said the Oklahoma-Texas segment “will help address the bottleneck of oil in Cushing that has resulted in large part from increased domestic oil production, currently at an eight-year high.
“Moving oil from the Midwest to the world-class, state-of-the-art refineries on the Gulf Coast will modernize our infrastructure, create jobs, and encourage American energy production. We look forward to working with TransCanada to ensure that it is built in a safe, responsible and timely manner, and we commit to take every step possible to expedite the necessary federal permits.”
TransCanada, which still must negotiate some easements and win approval from the U.S. Army Corps of Engineers and the U.S. Transportation Department, said it would treat landowners “with honesty, fairness and respect.”
The company said it had negotiated more than 99 percent of voluntary easements in Texas and close to 100 percent in Oklahoma.
Oklahoma elected officials hailed the announcement that the Oklahoma segment would proceed.
Sen. Jim Inhofe, R-Tulsa, said the decision means Oklahoma “will finally have the infrastructure we need to transport our immense crude supplies, and this will greatly enhance our energy security.”
Inhofe, the top Republican on the Environment and Public Works Committee, said the panel should hold a hearing in Cushing about what federal action is necessary to get the Cushing-to-Texas segment approved. The committee oversees the Army Corps of Engineers, the Transportation Department and the U.S. Fish and Wildlife Service, which also may have input.
He said he called Sen. Barbara Boxer, D-Calif., the chairman of the committee, to request the hearing.
“Of course, this smaller pipeline would in no way replace the need for the larger Keystone XL project, but a pipeline from Cushing to the Gulf is a no-brainer,” Inhofe said.
The Obama administration in November delayed consideration of the Keystone XL because of strong opposition in Nebraska to the pipeline's proposed route through an ecologically sensitive area.
However, as part of a December deal to extend the payroll tax cut, Republicans forced the administration to make a decision within two months. That resulted in the rejection last month since the Nebraska situation still hasn't been resolved.
TransCanada said Monday that it would supplement its new application with an alternative route through Nebraska once the route is selected.
Environmental groups, which have strongly opposed the Keystone XL pipeline, criticized TransCanada's decision on Monday to move ahead with the Gulf Coast project.
Kim Huynh, with the group Friends of the Earth, said, “Any attempt to move forward with any segment of the pipeline will be met with the same fierce grassroots opposition that stopped the pipeline the first time.
“We know that Big Oil will stop at nothing to further its profits, but it can't hide the dirty reality that importing more tar sands oil through our heartland endangers our land, water and climate. Friends of the Earth will continue to work to ensure that no part of this project is approved — not now, not ever.”