Though President Barack Obama and his State Department nixed the northern leg of TransCanada’s Keystone XL tar sandsย pipeline in November, the Canadian pipeline company giant has continued the fight inย a federalย lawsuit in Houston, claiming the Obama Administration does not have the authority to deny a presidential pipeline permit on the basis claimed that heย did.
As theย lawsuit and a related North American Free Trade Agreement (NAFTA) challenge proceed โ and as Keystone XL hasย become a campaign talking point for Republican Party presidential candidate Donald Trump โย TransCanada has quietly consolidated an ambitiousย North America-wide fracked gas-carrying pipeline network over the past halfย year.
Since Keystone XL North got the boot, TransCanada has either won permits or announced business moves in Canada, the United States and Mexico which will vastly expand its pipeline footprint and ability to move gas obtained via hydraulic fracturing (โfrackingโ) toย market.
Ohย Canada
North of the U.S. border, TransCanada landed the last permits it needed from the British Columbia Oil and Gas Commission on May 5 to build its proposed Coastal GasLink pipeline project. Coastal GasLinkย aims to carry gas obtained via fracking from theย Montney Shale westwardย to LNG Canadaโs proposed liquefied natural gas (LNG) export facility in Kitimat, B.C.
โThis is a significant regulatory milestone for our project, which is a key component of TransCanada’s growth plan that includes more than $13 billion in proposed natural gas pipeline projects which support the emerging liquefied natural gas industry on the British Columbia Coast,โย Russ Girling, TransCanada’s CEO said in a press release.ย
Coastal GasLink awaits a final investment decision fromย LNG Canada by the end of the year. If it gets the green light, pipeline construction of the 416-mile line will begin inย earlyย 2017.
Build Them or Buyย Them?
In the U.S., while TransCanada’s NAFTA lawsuit drags on, the corporation also announced a majorย $13 billion buy-outย acquisition of pipeline behemoth Columbia Pipeline Groupย on Marchย 17.ย
Columbia maintains a gargantuanย 15,000-mileย network of gas pipelines running across the U.S., with a crucial hub of crisscrossing pipelines based in the prolific Marcellus Shale basin, an epicenter for fracking in the northeast, particularly Pennsylvania. In a press statement announcing the deal, Girling pointed out just how big his company’s gas-carrying pipeline capacity has become in the U.S. and its nascent potential abilityย to carry that gas to U.S.-based LNG exportย terminals.ย
โThe acquisition represents a rare opportunity to invest in an extensive, competitively-positioned, growing network of regulated natural gas pipeline and storage assets in the Marcellus and Utica shale gas regions,โย Girling said in the company’s press release announcing the Columbia deal. โThe assets complement our existing North American footprint which together will create a 91,000-kilometre (57,000-mile) natural gas pipeline system connecting the most prolific supply basins to premium markets across the continent. At the same time, we will be well positioned to transport North America’s abundant natural gas supply to liquefied natural gas terminals for export to internationalย markets.โ
The deal has yet to be sealed, however,ย awaitingย both a final shareholder vote on June 22 and antitrust approval by the U.S. Federal Trade Commission. Wall Street giantย Goldman Sachsย acted as the financial adviser for the sale.ย
Kevin Allison,ย global resources columnist at Reuters Breakingviews, pointed to the acquisition of Columbia by TransCanada as an example of its shifting business strategy post-Keystone XL (even though the lawsuit, most certainly, is also part of the company’s business strategy). Rather than focusing on building new lines, he says TransCanada increasingly sees profit margin opportunities in buying ones already permitted and pumping oil and gas, like those owned byย Columbia.ย
TransMexico
As a general rule, oil and gas related developments in Mexico โ helped along by the privatization of the country’s energy and electricity sectors, itself spearheaded by the U.S. Department of State underย Hillary Clintonย โ have flown under the radar as compared to its neighbors to the north in North America. TransCanada’s pipeline moves south of the U.S. border, documented here on DeSmogย days after Obama’s November Keystone XL announcement, also have garnered far less attention than Keystone XL.
Canadian Broadcasting Corporation took note of these dynamics in a recentย article.
โThe regulatory oversight and environmental opposition is a fraction of what it is in Canada and the United States for a company looking to construct new pipelines,โ wrote the CBC. โMexico is proving to be a low-risk, high-reward business venture at a time when the pipeline company is struggling to construct new projects elsewhere in Northย America.โ
Sinceย November, when the company announced its victory in a bid from Mexico’s government to build the 155-mile Tuxpan-Tulaย pipeline set to carry fracked gas fromย the U.S. to supply Mexico’s electricity grid, TransCanada has announced other key maneuvers in Mexico. All of them, it turns out, connect toย Tuxpan-Tula.
For example, on April 11, the Mexican government chose TransCanadaย to build, own and operate the 261-mile long Tula-Villa de Reyes pipeline in Mexico. Tula-Villa is slated to connect to the existing 81-mile long Tamazunchale Pipeline.
Further, on May 20, Infraestructura Marina del Golfo (IMG) โ a joint venture between the Sempra Energy subsidiary company IEnova and TransCanadaย โ submitted a bid to operate theย Sur de Texas-Tuxpanย gas pipeline, which would connect to the Tuxpan-Tulaย pipeline (and to which the Tula-Villa de Reyes pipeline would connect). The 500-mile Sur de Texas-Tuxpan would carry gas initially obtained via fracking from Texas’ Eagle Ford Shale basin underwater through the Gulf of Mexico, into the other Mexico-based TransCanada pipelines and thenย flood Mexico’s energy grid with frackedย gas.
BNAmericas has reported that the Mexican government will announce the winner of that bid later thisย month.ย
The U.S. Commercial Service, an arm housed within the U.S. Department of Commerceโs International Trade Administration, promoted both Tuxpan-Tula and Tula-Villa de Reyes as potential business opportunities for U.S. corporations on itsย website.
Image Credit:ย U.S. Commercialย Service
Girling, TransCanada’s CEO, sees Mexico as the land of business opportunity for his company moving forward. And understandably so, given all of the company’s recent gas pipeline bid victories there, totaling 916 miles inย length.
โMexico has been a very good place for us to do business,โ he told CBC. โI have a very positive long-term view of the growth of Mexico and its position in North America. We foresee there will be more opportunities on the horizon inย Mexico.โ
The 916 miles of fracked gas pipeline TransCanada has carved out for itself in Canada amounts to just 250 miles shy of the length of the originally slated Keystone XL pipeline and longer by nearly an order of two than the 485-mile operational southern leg of Keystone XL (now called the Gulf Coast Pipeline).
And that’s not even counting the mileage obtained from the Columbia purchase or British Columbia’s Coastal GasLink pipeline. That aside, it’s safe to say that TransCanada is quickly morphing into โTransMexicoโ and more broadly into a North American fracked gas pipelineย empire.
Photo Credit: National Nurses United |ย Flickr
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