The Drilldown: Keystone XL construction in Canada not affected by U.S. court ruling, says TC Energy rep

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The Lead

Requests from TC Energy and the U.S. Army Corps of Engineers to repeal a court decision made earlier this year to cancel an environmental permit were rejected by the U.S. Court of Appeals last week. According to TC Energy Corp., this ruling will not impact the construction of the pipeline in Canada.

“While we are taking some time to review impacts to our 2020 U.S. construction scope, the ruling does not impact our plans for Canada, where work is getting underway for both pipeline and facilities construction,” Tery Cunha, a representative for TC Energy, wrote in an email, reported Edmonton Journal.

Cunha went on to say that TC is “evaluating our options and our next steps to continue advancing the project,” when asked whether they will take action to appeal the ruling by the court.

The permit, which would have allowed for the development of the Keystone XL pipeline through waterways in the United States, was criticized for not having gone through the appropriate consultation process when first approved.

In Canada 

Mark Little, CEO of Canada’s Suncor Energy Inc., worries that interest in low-carbon, green technologies including electric vehicles could be detrimental to the oil and gas industry in the same way that the COVID-19 pandemic has been.

“While Canadian oil and gas will remain a significant part of the global energy mix for some time, we have to take advantage of new opportunities that offer attractive growth prospects,” Little writes in an op-ed for the country’s Corporate Knights magazine.

As social distancing measures and economic freezes have resulted in a lack of ground travel, global demand for fuel has fallen by close to 30 per cent, with Suncor having cut its production by more than half. This shift, combined with the increasing desire for guidelines assessing the impact that future natural resource projects will have socially and environmentally, has put more pressure on the sector, according to Reuters.

Canadian Crude Index was trading at US$27.03 and Western Canadian Select at US$31.99 this morning at 8:08am EDT.


Back in April, OPEC+ had come to an agreement to cut their output by 9.7 million barrels per day in an effort to remediate falling oil prices. While Saudi Arabia, the assumed leader of OPEC, is pushing for shrunk production levels to continue until the end of the year, Russia, an ally of OPEC, has a different opinion about production curtailment.

“It’s for a month or two, not for half a year,” said a representative in the Russia oil industry, according to Reuters.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) intend to meet through video conference on June 4 to discuss prolonging production cuts.

In other news, a protest was held at an oilfield in southern England by Extinction Rebellion activists today.

“We’re calling on the government to stop investing in fossil fuels and to invest in a green recovery,” said one of the activists, reported Reuters.

On Monday morning at 8:08am EDT, West Texas Intermediate was trading at US$35.34 and Brent Crude at US$38.11.


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