WASHINGTON - Canada's hotly debated, long-delayed Keystone XL pipeline received its elusive U.S. presidential permit from Donald Trump on Friday, eight years and six months after it first applied to cross the American border.
The president made the announcement at the White House.
He was accompanied by the president of TransCanada Corp., the Calgary-based pipeline company that has wrestled with lawsuits, resistant landowners, protesters and Washington Democrats.
"You've been waiting for a long, long time," Trump said to TransCanada's Russ Girling.
"It's a great day for American jobs, and a historic moment for North America, and energy independence. This announcement is part of a new era of American energy policy that will lower costs for American families, . . . reduce our dependence on foreign oil and create thousands of jobs."
He said the many delays over the years "demonstrates how our government has too often failed its citizens and companies. Today we begin to make things right."
The new Republican president has removed one big obstacle by issuing the border-crossing permit, but more snags remain. The company must still settle with landowners, gain state permits and face possible court challenges before building the northern leg of the pipeline and connecting it to the already completed southern leg linked to Gulf of Mexico refineries.
Protesters intend to stop the project. The epicentre of the coming battle could be the same place where opposition to the pipeline began: Nebraska. TransCanada (TSX:TRP) still does not have deals with all the landowners there and it lacks a state permit.
The company said Friday it will continue to work with key stakeholders throughout Nebraska, Montana and South Dakota to obtain all the required permits and approvals.
In granting the permit, the U.S. government said it concluded that Keystone XL would serve the national interest after considering a range of factors, including energy security and the environment.
U.S. government studies have repeatedly found that the pipeline would have negligible impact on the environment and potentially even a positive one as a cleaner alternative to oil transport by rail.
But opponents dispute that broad finding. They point to specific conclusions embedded in past U.S. reviews — that if oil prices remain low and no other pipelines get built, the expansion of Alberta's oilsands will slow and so will its greenhouse-gas emissions.
Facing political pressure on the left, Barack Obama rejected the project.
In response, TransCanada filed a challenge under Chapter 11 of the North American Free Trade Agreement, alleging the U.S. government breached its legal commitments under NAFTA. That challenge has been dropped, TransCanada said Friday.
Republicans had repeatedly promised to reverse Obama's decision. That included Trump, who had often discussed the Keystone approval as a fait accompli, telegraphing intentions that the market received long ago.
"We believe that the receipt of the presidential permit was expected by the market," RBC Capital Markets said in a note to clients.
"We note that KXL is not included in our valuation for the stock and if the project moves forward, we view that as upside."
Trump signed an executive order in his first week in office that invited TransCanada to reapply for a permit and promised a decision within 60 days. That timeline was to expire Monday.
Awarding cross-border pipeline permits is technically the domain of the secretary of state. However, in this case, the file was officially handled by undersecretary Tom Shannon because his boss, former oil executive Rex Tillerson, recused himself from the decision.