The Trump administration will allow the existing Keystone pipeline to carry more oil-sands crude into the Midwest and U.S. Gulf Coast while the conduit’s decade-old expansion project faces renewed legal hurdles.
A White House permit issued Wednesday raises the cross-border shipping limit for the TC Energy Corp. line to 760,000 barrels a day, from 590,000 under a previous presidential permit, company spokesman Terry Cunha said in an email.
The White House decision came after President Donald Trump’s earlier approval of TC Energy’s proposed Keystone XL expansion project was hampered by a federal court decision that blocked most construction.
The company is planning to make use of less than a third of the additional capacity, Cunha said in an email Thursday. TC Energy held an open season for shippers to nominate additional contracted volumes on the system last year with plans to raise throughput using so-called drag resistance agents.
“While 760,000 barrels a day is the system capacity, we anticipate being able to move an additional 50,000 barrels a day for which we secured additional 20 year contracts and would anticipate starting to increase the flows in 2021,” Cunha said.
Canadian oil producers have faced a persistent shortage of export pipelines as several projects have been delayed for years by courts and local environmental opposition.
“This is excellent news for Canada’s energy sector, and hard-working people and families on both sides of the border who benefit from continued North American energy security and interdependence,” said Sonya Savage, energy minister of Alberta, home to the Canadian oil sands.