NRDC’s Suit to Block Canada-US Oil Pipeline Thrown Out

Posted by Steven Zweig on October 2, 2009 at 10:55 am

Oil pipeline construction in Canada. (image: neb.gc.ca)

The Associated Press reported Wednesday that a lawsuit seeking to block construction of a  new U.S.-Canada oil pipeline was dismissed.  The TransCanada Keystone pipeline is to run from the heart of Canadian oil country, Alberta, to Illinois, with later possible expansion to the U.S. Gulf Coast. Its planned capacity is 1.1 million barrels of oil per day, but could be upgraded to 1.5 million barrels. The investment to build the pipeline is estimated at $12 billion—money that would be very welcome in this recession—and the proposed completion date is 2012.

The National Resources Defense Council had challenged the pipeline on the grounds that its permit was based on a deficient environmental impact statement. A federal judge threw out the case on procedural grounds, ruling that the NRDC lacked the authority to bring it. With this dismissal, a significant obstacle to the pipeline has been removed, immediately buoying TransCanada’s stock on the optimism that the project will go forward.

This pipeline is in addition to another large Canadian-U.S. pipeline project: the Alberta Clipper pipeline, to run from Alberta to Wisconsin.  The reason for the proliferation of pipelines is the projected  growth in oil production from Canada’s tar sands It is expected that daily production from these sands will rise by 1.8 million barrels by 2015.

The U.S. consumes 19.5 million barrels of oil daily.  Even at a level of 1.1 million barrels per day, the TransCanada pipeline will bring in sufficient oil to meet 5.6 percent of our current needs. This could have a modestly positive effect on crude and heating oil prices by increasing supply. It could also make us slightly less vulnerable to natural disasters, such as hurricanes, in the Gulf of Mexico, by making it easier to bring in oil from our northern border.

Current and planned routes for Canada-to-US oil pipelines. (image: transcanada.com)

This article was posted on Friday, October 2, 2009 at 10:55 am and is filed under Blog, crude oil prices, environmental regulation, heating oil prices, international politics, oil companies

2 Responses to “NRDC’s Suit to Block Canada-US Oil Pipeline Thrown Out”

1. November 6, 2009 at 3:40 pm
   SD Ranchers Latest Group to Oppose Planned Oil Pipeline | HeatingOil.com says: says:
   

   [...] the ongoing saga of the TransCanada Keystone pipeline, ranchers who live along the pipeline’s route in western South Dakota voiced concerns about oil [...]
2. October 4, 2009 at 11:37 pm
   Economics and Politics of Crude Oil Prices says: says:
   

   [...] the intensive energy required for tar sands oil production is not economically profitable. The case was dismissed by a federal judge on procedural grounds, claiming the NRDC lacked the proper authority to [...]