- APFILE - The marker that welcomes commuters to Cushing, Okla. is seen in this photo.
A Canadian company said Monday it will build an oil pipeline from Oklahoma to Texas after President Barack Obama blocked the larger Keystone XL pipeline from Canada.
Calgary-based TransCanada says the new
project does not require presidential approval, since it does not cross a
U.S. border. The shorter pipeline is expected to cost about $2.3
billion and be completed next year, the company said.
The Obama administration had suggested
development of an Oklahoma-to-Texas line to alleviate an oil glut at a
Cushing, Okla., storage hub.
Press secretary Jay Carney said Obama welcomed the announcement.
"Moving oil from the Midwest to the
world-class, state-of-the-art refineries on the Gulf Coast will
modernize our infrastructure, create jobs, and encourage American energy
production," Carney said in a statement. "We look forward to working
with TransCanada to ensure that it is built in a safe, responsible and
timely manner, and we commit to take every step possible to expedite the
necessary federal permits.
TransCanada said Monday it still hopes to build the full 1,700-mile Keystone XL
pipeline, which would carry oil derived from tar sands in Alberta,
Canada to refineries along the Texas Gulf Coast. The proposed $7 billion
pipeline would run through Montana, South Dakota, Nebraska and Kansas
before reaching Oklahoma.
The company is working with Nebraska officials to find a route that avoids the environmentally sensitive Sandhills region.
Obama rejected the Keystone XL pipeline last
month, in large part because of the uncertainty over the Nebraska
route. Obama said there was not enough time for a fair review before a
looming deadline forced on him by Republicans. The action did not kill
the project but -- for the second time in three months -- put off a
tough choice on the pipeline project, which has become the focus of a
heated political fight.
Pipeline supporters -- including congressional Republicans
and many business and labor leaders-- call the project a key job
creator, while opponents say it would transport "dirty oil" that
requires huge amounts of energy to extract. They also worry about a
possible spill.
Carney said that Obama's Jan. 18 decision
"in no way prejudged future applications" by TransCanada for the full,
1,700-mile project.
"We will ensure any project receives the
important assessment it deserves, and will base a decision to provide a
permit on the completion of that review," he said.
Russ Girling, TransCanada's president and
CEO, said the Oklahoma-to-Texas pipeline will transport growing supplies
of U.S. crude oil to meet refinery demands in Texas.
"Gulf Coast refineries can then access lower
cost domestic production and avoid paying a premium to foreign oil
producers," he said, adding that the project should reduce U.S.
dependence on crude from outside North America.
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