Patrick B. McGuigan
Robert Jones, vice president for the privately-funded Keystone XL project, told CapitolBeatOK the southern leg of the project will take about one year to finish once all permitting is in place.
Jones said he is optimistic the Obama administration will ultimately give a green light to build a pipeline from Canada through Oklahoma all the way to the Gulf Coast. Jones told reporters that once full-scale work on the southern pipeline begins this summer, the project should be finished in nine to 12 months.
Company officials estimate the project will create at least 600 direct jobs in Oklahoma. Another 400 jobs will be triggered by the pipeline work for a total of about 1,000 jobs in Oklahoma.
In all, work on the southern end of the envisioned pipeline will lead to a total of 4,000 jobs in construction and related fields.
The entire pipeline project, as envisioned by TransCanada, would create around 9,000 jobs if a pipeline is built from Canada south to the Gulf Coast, passing through Cushing and on to the Gulf Coast, Jones and company officials said Thursday (March 22).
Jones’ comments came as he met with about two dozen reporters at the Cushing, Oklahoma, pipe yard where President Barack Obama spoke about what his administration calls an “all-of-above” energy policy, including solar, wind, oil and natural gas.
Jones believes the economic and energy reasons to build the entire pipeline “have not changed.”
Discussing the issue with reporters, Jones said, “The U.S. consumes over 15 million barrels [of oil] every single day, and they import around 11 million barrels. That’s about 70 percent of their needs. So our decision to proceed with the … pipeline project will help move this [crude] oil that is involved here in Cushing, and get it to the largest oil refining complex in the world on the Gulf Coast.
“Now, Americans understand the importance of pipelines. There is over 200,000 miles of oil pipelines in the United States and almost 2 million miles of pipelines throughout the United States.”
Jones commented that observers need “remember … this project is completely privately funded. There is no government subsidies, there are no tax dollars of anything being funded. Our customers, the refiners along the Gulf Coast, have asked us to build this project.
“We’re committed to proceed with not only the Gulf Coast project, but also the Keystone XL project. We also know that this project is going to bring thousands of jobs, very important jobs. The Keystone XL project and the Gulf Coast project is in the national interest, because it helps with energy security. It helps us strive toward energy independence.”
Jones stressed, before answering questions from reporters, “the Keystone XL pipeline is not an export pipeline. In fact, It is meant to fill that need, to reduce our exports. It will displace oil that comes from Venezuela and countries in the Middle East. This is the oil that is currently being refined in the Gulf Coast.
“There is very little Canadian oil being refined in the Gulf Coast. And, right now, oil in the mid-continent [area] doesn’t have enough pipeline capacity to get to the Gulf Coast. So, we have an opportunity here, an opportunity to displace oil from OPEC nations with secure and reliable U.S. and Canadian crude oil.”
Jones consistently declined opportunities to criticize the Obama administration over delays in the project. He said he was “very happy to hear the president’s comments” concerning the southern pipeline work. Toward the end of his time with journalists, Jones said he agreed President Obama is “a friend” of the pipeline project.
Questioned by reporters as to whether or not the Obama administration’s recent announcements advanced things for the project, he responded, “What I can tell you is that we’re working with the federal agencies. The lead agency that we’re working with is the U.S. Army Corps of Engineers. Also, we’re working with U.S. Fish and Wildlife. In order to start fill construction, we anticipate getting all of the permits needed by about mid-year.”
He said, “I haven’t had a chance to read the executive order, but we’re getting good cooperation. Again, we’re scheduling our crews and we can be under full construction by mid-year.”
He said, in dialogue with CapitolBeatOK, “Once we start construction it will take us one year, less than a year … to complete construction to the Gulf Coast.”
Questioned about the capacity of the pipeline, Jones said, “This is a 36-inch pipeline. The initial capacity will be around 5 and 700,000 barrels. Obviously, this pipeline needs to be up-streamed portion to get to its full capacity, which is 830,000 barrels. This is just the very important first part. Once we build the Keystone XL pipeline the capacity will go to 830,000 barrels. …
“Now, the Keystone pipeline system – there’s already a pipeline in service – it moves around 600,000 barrels. So the combined capacity will be approximately 1.4 million barrels a day, it’s a pipeline system.”
Asked again if the administration’s moves last week had sped up the process, he replied judiciously, saying, “I think what I heard today is that the administration will continue on with its cooperation, and that the schedule we had in place to start full construction by mid-year, will be secure.”
As for the proposed rerouting of the northern leg of the project, Jones told reporters, “We are in the process of finding a new route through Nebraska that avoids the Sand Hills. TransCanada is committed to doing that. We are awaiting security on that process. We will then refile for a presidential permit.
“We anticipate that will occur in the next few months and that we will be reapplying at that time. Hopefully, we will be able to start construction next year in regards to the Keystone XL project.”
Asked if he was confident the president would approve the northern tier along a new route, Jones commented, “I feel that what I heard he is going to do is he’s going to ‘play it straight.’ That’s what I heard. In other words, what we’re going to do is we’re going to file. We are going to review the process. We’ve done a tremendous amount of work. I anticipate that they will follow that process.”
At the moment, much of the focus for a possible northern extension is on Nebraska, and that state’s Department of Environmental Quality.
Concerning the southern work, Jones said, “We have enough contracts to proceed with the project.” His words in response to CapitolBeatOK’s question about total jobs were: “We anticipate direct construction jobs to be about 4,000 jobs and then, from the Keystone XL portion, another 9,000.:
Jobs in Oklahoma for the southern work were put in the “600 to 800” range, but Jones said, “That would be just for the pipeline construction … There is also Cushing terminal construction, there’s pump station construction, there’s inspection, engineering. So, there is probably about a thousand jobs directly impacted.”
The widely reported Cushing speech was scheduled in response to a White House request. Jones observed, “It happened very quickly. We were asked by the White House if we would host this event. This was an event for the White House. It was not initiated by us. We were just being cooperative.:
One reported noted that some local companies had been critical of the president. Jones responded carefully, saying, “You know, TransCanada is in the business of transporting energy. We do an incredibly good job. We have a very good reputation. What I think is what we’re seeing is a recognition of how important energy is to the economy, and how important this project is with regards to solving some of the problems we have here.”
Asked to outline the construction process, he said, “We’re going to start … in a number of sections. In order to get this done in nine to 12 months, we’re going to need to have multiple crews working. So, they’ll either be working at pump stations, or Cushing terminal, or pipeline spreads that Dave can talk about. But we have one that will start right away here in Cushing.”
As for other firms that might be involved, he reflected, “I would say that there are a number of proposals, and that there is a need for a number of projects as well. There is a significant bottleneck here, and there will be future growth. So, I would suggest that they move on more than one project.”
Asked to clarify his point about the pipeline contributing to reduced need for crude oil imports, he stressed, “This oil needs to get to those refineries because right now they import.”
Jones said he did not know “the exact tonnage” of pipe in Cushing, but “the first 41 miles is in this yard.”
He disclosed the southern project already has in hand most of the land easements and agreements needed to proceed. In response to questions, the characterized that as “99 percent’ complete and said he did not think eminent domain would be required for any of the work, but would be used as a “last resort.”
When a reporter asked Jones if he now considered the president a friend of the pipeline project, he responded, “I think that’s what we heard. That’s certainly what I heard today.”