Paul Miller: Executive vice-president and president, liquids pipelines
In anticipation of TransCanada’s upcoming Annual Meeting on May 1, members of TransCanada’s executive leadership team share their thoughts on significant milestones from the past year and the company’s priorities for 2015.
Liquids pipelines are the largest pillar of TransCanada’s growth plan, with approximately $25 billion in new projects underpinned by long-term contracts in development for completion by the end of the decade. We are developing an enviable position in the liquids transportation business as we move forward with our strategy of connecting key producing areas in Canada and the United States to domestic and international refining markets.
The Keystone Pipeline System currently transports one-fifth of Canada’s crude oil exports to the United States and has safely transported more than 830 million barrels to U.S. markets since it began operation in July 2010. Keystone is also proving to be a valuable platform for future growth. In January 2014, we completed the Gulf Coast Extension, which provides a direct route for our shippers from Hardisty, Alberta to Port Arthur, Texas. Keystone will extend its market reach even further in 2015 as we complete the Houston Lateral and Terminal project.
Despite the unprecedented delays on Keystone XL, TransCanada and our shippers remain fully committed to this much-needed project. The Final Supplemental Environmental Impact Statement issued by the Department of State in January 2014 reinforced previous conclusions that Keystone XL would be built and operated safely with minimal impact to the environment. The report also confirmed the benefits of the project would include the creation of more than 40,000 jobs and generate billions of dollars in economic activity for the U.S.
On February 24, 2015, President Obama vetoed bi-partisan legislation to approve the Keystone XL Pipeline. Despite this disappointing decision, TransCanada will keep working in good faith with the U.S. Department of State and other federal agencies to address any outstanding concerns with regard to the project as we have done throughout the permitting process. We are expecting Keystone XL to begin service approximately two years after receiving a Presidential Permit to allow the pipeline to cross the Canada-U.S. border.
Our $12-billion Energy East Pipeline Project has secured long-term take-or-pay contracts to ship approximately one million barrels per day of crude oil from Western Canada to refineries and proposed marine terminals in Eastern Canada. In October 2014 we filed an extensive application for Energy East with the National Energy Board. Over the past two years we hosted more than 115 open houses along the proposed route, and engaged over 13,000 Canadians – local residents, municipal officials, landowners and First Nations and Métis communities – to hear your thoughts about the project.
After listening to our stakeholders, we announced on April 2 that we would not proceed with the proposed marine terminal in Cacouna, Québec as a result of the federal Committee on the Status of Endangered Wildlife in Canada recommended that beluga whales in the Saint Lawrence Estuary be reclassified as an endangered species. We are reviewing potential alternative terminal options in Québec and will take the necessary time to finalize other changes to the project as we move forward. This is something we won’t take lightly. We need to ensure we find solutions that are beneficial to all parties involved. Subject to regulatory approvals, we anticipate the project being complete by 2020.
Our portfolio of commercially secured projects will play a key role in transforming our company. Bringing Keystone XL and Energy East to fruition, in addition to our smaller-scale projects will provide us with approximately 2.5 million barrels per day of long-haul capacity underpinned by two million barrels per day of long-term contacts, positioning us as leaders in the pipeline liquids transportation business.