Trump approves northern leg of Keystone pipeline

President Trump yesterday made good on his campaign promise with the state department approving the 800,000 barrel a day capacity northern leg of the Keystone pipeline.

The pipeline, which the Obama administration had held up for years, would carry oil from the Canadian oil sands in Alberta down to Nebraska, and further to the Gulf Coast or Midwest refineries.

The approval of the controversial TransCanada Corp pipeline meant more North American crude and fuel could be flowing to the world market.

The pipeline would also further strengthen the  bonds between the two key North American producers and increase the interdependence of the US on Canada, as a source of imported oil, over OPEC and other producers. The US imports nearly half of the nearly 8 million barrels a day of crude from Canada.

"No surprise here on the Keystone decision. It was clearly going to be reversed. The decision not to build Keystone by the Obama Administration was never really about Keystone. The State Department, in reviewing it, had indicated that it would have no impact on carbon emissions. Rather, the Obama decision was about symbolism and the Paris climate conference," said Daniel Yergin, vice chairman of IHS Markit.

The decision has angered environmentalists, but the controversial project has to clear several hurdles yet, including financing, permits and legal challenges.

"TransCanada will finally be allowed to complete this long-overdue project with efficiency and with speed," Trump said in the Oval Office. 

Ross Girling, TransCanada CEO and Sean McGarvey, president of North America's Building Trades Unions were at the Oval Office with Trump during the announcement.

The Obama administration had blocked the pipeline linking Canadian oil sands to US refiners, claiming it would do nothing to cut fuel prices for US motorists and would contribute to emissions linked to global warming.