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Good news for the Keystone XL Pipeline?


I had visions following the four days of the Condorian Trump-fest. Neil Young was suddenly awoken from his enviro nap! Then I saw Barack Obama, not even lifting his head up when putting on the 20th green of his favorite legacy course. Jane Fonda was rearranging her protest priority agenda… “What was the issue at the last one, again? Because I was really good wasn’t I? Neil said so. Someone go wake up Neil!”

With the stroke of a pen, President Trump, with a ferocious efficiency that would make any CEO blush with pride, reduced the environmental status of the Obama efforts to that of a political parenthesis. With his executive order, the mothballed Keystone XL Pipeline has been de-cocooned – on Trump’s terms. The same goes for the equally media-friendly Dakota Access line.

One of President Trump’s first, and perhaps many first thoughts, is that the 1,200-mile XL should of course be made of American steel. This may be the first of many kinks in the negotiations, which Trump claims will be American-led, which I assume means the rest of us follow. I guess that’s where the “neg” in negotiations comes from.

As I understand it, most of the pipe has been bought and paid for and has been in storage while Obama was deciding to not decide. Surely the pipe doesn’t have to be re-piped? Call me stupid, but isn’t this stored pipe the actual pipeline that he is willing to approve? 

Trump is not a pipe man, he’s a money man. 

I wouldn’t be the least bit surprised if Trump’s real goal is for a piece of the action, arguing if this non-American made pipe is going to go through my America, then pay up or show me the financial benefit options. 

What’s in it for Trump? Lower cost oil sands crude will be processed by U.S. refiners on the Gulf, and these lower input costs will show up at the pump and the energy related bills of all U.S. consumers. 

This harkens to the position of our very own premier of B.C., Christy Clark, when “negotiating” with her Alberta counterpart on the Gateway and Kinder Morgan pipelines. Ms. Clark’s insistence for financial compensation for approval of any pipeline into her province from Alberta was claimed to cover environmental costs, in case of a pipeline failure. As interprovincial pipelines fall under federal authority, and the feds have already anted up for coastal spills, then one wonders where the B.C. requested pipeline levy would actually go.

Trump’s approval of the XL and Dakota lines are now lines on paper – or are they paper lions? 

An executive order sounds foreboding, but it is not an ultimatum, it’s a stern request to get things in order and go back to the drawing board with sharper pencils. Both have a long way to go if they can get there. 

Although the news is great for western crude producers, if I could drag Mr. Trudeau away from his cross Canada donut food fight, I would suggest that he and all provincial leaders accelerate the pipeline proposals to get western Canadian crude to tidewater ports and refineries on Canadian coasts, because the devil you think you know may be the devil you don’t want to know.


Roger McKnight

Roger McKnight

Roger McKnight is the Chief Petroleum Analyst with En-Pro International Inc. Roger has over 25 years experience in the oil industry, and has held senior marketing management positions responsible for national and international accounts. He is the originator of the card lock concept of marketing on-road diesel that is now the predominant purchase method of diesel in Canada. Roger's knowledge of the oil industry in North America, and pricing structures has resulted in his expertise being sought as a commentator by local, national, and international media. Roger is a regular guest on radio and television programs, and he is quoted regularly in newspapers and magazines across Canada.
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