Explained-What is happening with the $9 bn Keystone XL oil pipeline

Business Standard Explained: What is happening with the $9 bn Keystone XL oil pipeline?

Most recently, a Canadian indigenous group said it would invest C$1 billion ($764.35 million) in the project, which has been in the works for 12 years.

By Rod Nickel WINNIPEG, Manitoba (Reuters) - TC Energy Corp says it is continuing to advance its Keystone XL (KXL) oil pipeline, the $9 billion project that would move oil from the province of Alberta to Nebraska.

Most recently, a Canadian indigenous group said it would invest C$1 billion ($764.35 million) in the project, which has been in the works for 12 years.

That surprised some, as KXL has been slowed by legal issues in the United States, and faces a potentially fatal blow next year when President-elect Joseph Biden takes office, if he follows through on a vow to scrap KXL's presidential permit.

WHY HAS THIS PROJECT BEEN DELAYED SO LONG? Keystone XL was an early target in a strategy by environmentalists to choke the expansion of Canada's oil sands by opposing new pipelines to move its crude to refineries. Former U.S. President Barack Obama, a Democrat, axed the project in 2015, saying Canada would reap most of the economic benefits while the project would add to greenhouse gas emissions. President Donald Trump, a Republican, issued a presidential permit in 2017 that allowed the line to move forward, and several environmental groups sued the U.S. government.

IS THIS PIPELINE STILL NECESSARY? This is debateable. Work to increase capacity of two other Canadian export pipelines, the government-owned Trans Mountain and Enbridge's Line 3, is proceeding with fewer remaining hurdles than KXL. Some analysts say these projects will provide enough capacity for the foreseeable future, now that analysts and major industry groups, including OPEC, expect that global oil demand will peak sooner than was previously anticipated.

Alberta Premier Jason Kenney has said the project is important because he is not certain that Trans Mountain will proceed.