Two weeks ago, President Trump issued a permit intended to clear the way for construction of the final link of the TransCanada Corp.’s Keystone XL oil pipeline. The latest obstacle to the beleaguered pipeline project surfaced last November when a Montana federal district judge ruled that the U.S. State Department’s environmental analysis was lacking.
The new permit substantiates that the president’s authority isn’t subject to judicial review. Nonetheless, the administration has pledged to conduct environmental reviews and assess impacts on endangered species in accordance with the law.
Permitting for the 2,147-mile pipeline began more than 10 years ago and even though the project has passed every environmental sufficiency test, it stands as the most scrutinized pipeline project in U.S. history.
While Mr. Trump’s new permit will likely negate the threat of more federal delays, the Nebraska Supreme Court has yet to render a decision as to whether regulators properly approved a new route for the pipeline in late 2017.
As time has passed, crude oil prices have been on a roller coaster ride as new discoveries, political turmoil in exporting countries, and pressure from OPEC continue to destabilize the global market.
Additionally, a massive new shale oil discovery in the Permian Basin of West Texas has made oil extraction from the Western Canadian Sedimentary Basin in Alberta less competitive and, therefore, less profitable. Permian shale oil can be extracted for as little as $33 per barrel in much closer proximity to refineries.
The Permian Basin was thought to be a played-out oil field; however, through technological innovation and robust development, the basin has been resurrected as one of the world’s most productive oil fields, second only to the Ghawar field in Saudi Arabia. At 4 million barrels a day, the Permian outproduces all of the 14 OPEC members except Iraq and Saudi Arabia.
In Texas, oil pipelines are constructed on a fast track. As many as 15 oil and gas pipelines connecting the Permian to refineries in the Gulf of Mexico are targeted for completion by the middle of 2020, potentially increasing exports to 8 million barrels a day.
Permian oil helped boost domestic oil production by 2 million barrels a day last year, to a record of 11.9 million barrels. The United States is now the world’s top oil producer, helping to fulfill President Trump’s goals of attaining energy independence and further elevating the nation’s leverage against corrupt and oppressive states around the world.