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US manufacturers said hurt by Keystone XL project delay

Keywords: Tags  Keystone XL, crude oil, TransCanada, tar sands, Delta Industrial Valves, Simon Fraser University, Natural Resources Defense Council, Anthony Swift Keith Stelter

NEW YORK — The delay in approving TransCanada Corp.’s proposed Keystone XL pipeline has significantly hurt manufacturers tied to the industry, the senior executive of a valve maker testified during a hearing on a proposed law that would expedite approval of the controversial project (, April 4).

"When the U.S. government failed to move forward with the Keystone XL pipeline, many of the large (oil sands) projects (in western Canada) were put on hold or canceled," Keith F. Stelter, president and co-owner of Niles, Mich.-based Delta Industrial Valves Inc., said in voicing his support of the Northern Route Approval Act.

Building the Keystone XL pipeline would be a boon for the region’s oil industry, with Delta likely "doubling in size over the next 10 years" if the project were approved, he said.

Stelter also raised concerns that the United States’ refusal to approve the pipeline has led the Canadian government to allow China, the other large potential customer of Alberta crude, to invest more in the oil sector in the western part of Canada.

"This is, or should be, very concerning to the U.S. government," he said, citing as a precedent the move by Chinese companies to scoop up a large number of copper and nickel projects in Canada.

However, opponents of the Keystone XL pipeline counter that the domestic market will likely remain the most viable outlet for oil sands crude, as two planned pipelines to Canada’s western coast have a "less than 50-percent chance" of being built due to environmental and right-of-way concerns, according to Mark Jaccard, a professor at the School of Resource and Environmental Management at Burnaby, British Columbia-based Simon Fraser University.

Opponents of the pipeline also contend that, contrary to an opinion voiced in the U.S. State Department’s recent draft supplemental environmental impact statement for the rerouted Keystone XL pipeline (, March 4), oil sands producers need the pipeline to keep their operations profitable and develop new fields, Anthony Swift, an attorney with the New York-based Natural Resources Defense Council, said.

Getting a barrel of crude oil to the Gulf Coast from Alberta currently costs producers about $31, while pipeline costs would only be $8 to $9.50 per barrel, he said, also agreeing that the Keystone XL project remains the most likely pipeline to be built.

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