Trump issued a new permit
On March 29, President Trump issued a new presidential permit for TransCanada’s (TRP) Keystone XL pipeline project. The new permit is expected to clear some of the project’s key hurdles. In November 2018, a US district court ruled that the Keystone XL pipeline’s environmental assessment wasn’t adequate. TransCanada wanted to continue the preparation work for starting the pipeline’s construction while the environmental assessment case is under consideration. However, District Court Judge Brian Morris denied TransCanada’s request in February.
The November ruling, which was in response to the 2017 presidential permit, isn’t applicable with the fresh permit. The company should be able to proceed with the preparation work for the pipeline’s construction. In a press release, TransCanada thanked President Trump for supporting the project. The company didn’t say anything about whether it will start the preparation work for the pipeline this year.
President Trump issuing a new permit for the project is an unprecedented move. To proceed with the project, TransCanada also needs a positive decision from the Nebraska Supreme Court in a challenge to the Nebraska Public Service Commission’s project approval.
Keystone XL pipeline will transport oil from Alberta’s oil sands reserves to Nebraska. The project was proposed in 2009. After a decade, the construction still hasn’t started. TransCanada stock has risen 26% in 2019 and outperformed the Energy Select Sector SPDR ETF (XLE).
Many Canadian pipeline projects continue to face regulatory and environmental hurdles. Kinder Morgan (KMI) sold its Trans Mountain expansion project to the Canadian government, while Enbridge’s (ENB) Line 3 Replacement project got delayed by roughly a year.