The following is an excerpt from Canaccord Genuity's Morning Coffee newsletter.
The U.S. State Department released its Final Environmental Impact Statement (FEIS) on
TransCanada Corp.’s (
TSX: T.TRP,
Stock Forum) Keystone XL oil pipeline.
The monstrous 11-volume environmental impact study appears to indicate that XL will generate less C02 than the alternative (including rail) and that XL is unlikely to increase the pace of development of the oil sands.
The FEIS also appears to be consistent with the draft EIS published last year. The clock now starts ticking on the 90-day national interest determination review – but there are off-ramps for the 90-day period to be extended.
Following the 90-day period, there is unquantifiable time for the Secretary of State John Kerry to review the submissions and to determine if he needs more info from the company to make an assessment. If he determines that XL is in the national interest, he will communicate that to the eight agencies in the NID review.
There is another 15-day period where any one of the eight federal agencies can disagree with the determination. If so, the application gets forwarded to President Obama for consideration and final review. So while it could take as little as 90-120 days for a presidential permit decision once the FEIS is released, there is enough slack built into the process to move the timing out considerably.
Also, keep in mind that, once/if a Presidential permit is issued, TRP has indicated it would take 18-24 months to construct the line. In light of the constant delays for this project and management indicating the capital costs would rise materially from the current US$5.3 billion estimate.