Institute for Energy Economics and Financial Analysis (IEEFA.org) has published the following news article today, June 30,2017. Much of the $3 billion spent was for steel pipe, land rights and lobbying.
The oil shale/frackers are shooting themselves in the foot, as they are the cause of the world-wide oil glut which is keeping prices down. When will these fossilized fossil-fuel magnates arrive in the 21st century and invest in sustainables?
Comments by OSFR historian Jim Tatum.
-A river is like a life: once taken, it cannot be brought back-
Wall Street Journal/Dow Jones Newswires:
Keystone XL is facing a new challenge: The oil producers and refiners the pipeline was originally meant to serve aren’t interested in it anymore.
Delayed for nearly a decade by protests and regulatory roadblocks, Keystone XL got the green light from President Donald Trump in March. But the pipeline’s operator, TransCanada Corp., is struggling to line up customers to ship crude from Canada to the U.S. Gulf Coast, say people familiar with the matter.
TransCanada Chief Executive Russ Girling remains committed to completing Keystone XL and believes it will prove profitable in the long term, say two people familiar with his thinking. But it may be years before the company recoups its investment in the pipeline, these people say.
TransCanada has spent $3 billion to date on Keystone XL, much of it on steel pipe, land rights and lobbying. Completed, the pipeline would travel 1,700 miles from Alberta to Steele City, Neb., where it would link up with existing pipelines that run to the Gulf Coast.
The lack of interest has put the pipeline’s fate in jeopardy. The company, based in Calgary, Alberta, has said it wants enough customers to fill 90% of Keystone’s capacity before it proceeds. It started to aggressively court potential customers earlier this year as it seeks to meet that target, according to people familiar with the situation.
TransCanada expects the pipeline, which would carry up to 830,000 barrels of oil a day, to cost $8 billion, compared with its initial estimate of $7 billion. The company took a $2 billion write-down related to the pipeline last year.
A TransCanada spokesman said the company is making progress with customers and anticipates it will firm up support in coming months. The company has said construction could begin next year and finish as early as 2020.
The uncertain outlook for Keystone XL stands in contrast to Mr. Trump’s upbeat rhetoric in March. The president invited Mr. Girling to the Oval Office and announced he was reversing an Obama administration move to block construction, declaring, “It’s going to be an incredible pipeline, greatest technology known to man.”
But much has changed in the oil markets since TransCanada first filed an application with the State Department in 2008 for a cross-border permit.
Back then, the price of oil had surpassed $130 a barrel, producers were rushing to pump as much as possible and refiners were itching to secure steady supplies. Today, oil is trading around $45 amid a global supply glut caused in part by the emergence of American shale drillers.
Refiners want the flexibility of being able to buy oil from wherever it is cheapest. In a world awash in low-price oil, Canadian crude doesn’t look as attractive as it once did. Many refiners thus far are unwilling to commit to long-term deals for Canadian crude, say people familiar with the matter.
Meanwhile, uncertainty about output growth from Canada’s oil sands has given producers pause about signing long-term agreements for space on a pipeline they may not need, people familiar with the matter say.
While forecasters predict production there will grow into the next decade, largely due to investments already made, some analysts warn increases beyond that are far from assured. The oil-sands industry faces potential regulatory headwinds as Canada seeks to reduce carbon emissions to comply with global climate agreements.