Media Advisory - Independent Study Finds Keystone Gulf Coast Expansion to Stimulate More Than $20 Billion in New Spending For U.S. Economy
Calgary, Alberta – June 17, 2010 – An independent economic study finds that construction of the Keystone Gulf Coast Expansion Pipeline project should provide significant, positive contributions to the U.S. economy valued at over $20 billion.
The Perryman Group study also states that the proposed pipeline project should improve U.S. energy security with the ongoing benefit to the U.S. economy of a more stable source of consistent energy supply over an extended period of time.
The study estimates that during construction, the $7 billion pipeline project is expected to stimulate:
The study further concluded that once the pipeline is operational, the states along the pipeline route are expected to receive an additional $5.2 billion in property taxes during the operating life of the pipeline.
The study also highlights the significant ongoing benefit to the U.S. economy of a more stable, consistent and reliable supply of oil. When completed, the Keystone Pipeline System is expected to provide five per cent of current U.S. petroleum-consumption needs and represent nine per cent of U.S. petroleum imports. Once permitted and completed, the Keystone Gulf Coast Expansion project will supply roughly half the amount of oil that the U.S. currently imports from the Middle East or Venezuela.
The Perryman study conservatively estimated the permanent increase in stable oil supplies the Keystone Gulf Coast Expansion pipeline creates will add more than 250,000 permanent jobs for U.S. workers and add more than $100 billion in annual total expenditures to the U.S. economy. These figures assume that oil prices remain stable at the “2007 average price per barrel of $66.52.” On the other hand, “If high oil prices prevail, the effect of the increase in stable oil supplies” is even more pronounced, adding as many as 553,000 permanent jobs and an annual increase in total expenditures of $221 billion to the U.S. economy. (Note: for the high oil price scenario, The Perryman Group “used prices equal to the peak cost per barrel reached during the summer of 2008 of approximately $147.)
The project received approval in March 2010 from both the South Dakota Public Utility Commission and the National Energy Board in Canada for the proposed Keystone expansion. Construction is planned to begin in the first quarter of 2011 with deliveries of crude oil to the U.S. Gulf Coast expected to start in the first quarter of 2013.
When completed, the expansion project will increase the commercial capacity of the Keystone Pipeline System from 590,000 barrels per day to approximately 1.1 million barrels per day. The $12 billion system is 83 percent subscribed with long-term, binding contracts that include commitments of 910,000 barrels per day for an average term of approximately 18 years. Commercial operation of the first phase of the Keystone system is expected to commence in the summer of 2010.
The Keystone expansion project is a planned 1,959-mile (3,134-kilometre), 36-inch crude oil pipeline stretching from Hardisty, Alberta and moving southeast through Saskatchewan, Montana, South Dakota and Nebraska. It will link up with a portion of the Keystone Pipeline that will be built through Kansas to Cushing, Oklahoma and facilitate take away capacity from US hubs located on the pipeline. The pipeline will then continue on through Oklahoma to a delivery point near existing terminals in Nederland, Texas to serve the Port Arthur, Texas marketplace.
To view a map of the proposed pipeline route and obtain a copy of the study, please visit the project web page at www.transcanada.com/keystone
With more than 50 years’ experience, TransCanada is a leader in the responsible development and reliable operation of North American energy infrastructure including natural gas and oil pipelines, power generation and gas storage facilities. TransCanada’s network of wholly owned natural gas pipelines extends more than 60,000 kilometres (37,000 miles), tapping into virtually all major gas supply basins in North America. TransCanada is one of the continent’s largest providers of gas storage and related services with approximately 380 billion cubic feet of storage capacity. A growing independent power producer, TransCanada owns, or has interests in, over 11,700 megawatts of power generation in Canada and the United States. TransCanada is developing one of North America’s largest oil delivery systems. TransCanada’s common shares trade on the Toronto and New York stock exchanges under the symbol TRP. For more information visit: www.transcanada.com
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