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Pipeline rejection could set precedent

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By Bloomberg News
Saturday, Dec. 21, 2013, 7:06 p.m.

Rejecting TransCanada Corp.'s $5.4-billion Keystone XL pipeline because of carbon emissions in the oil sands would set a precedent for all U.S. infrastructure projects, Chief Executive Officer Russ Girling said.

It would be harder to build car plants and T-shirt factories, as well as other cross-border pipelines, if President Obama makes a decision on the proposed Keystone XL line based primarily on emissions from oil-sands development, Girling said in an interview. New factories may face reviews based on their energy sources, he said.

“This has become a precedent for infrastructure in the U.S.,” Girling said. “We're not going to build any other export access into the U.S. out of Canada until we resolve this issue.”

Oil-sands developers are counting on Keystone XL to lift heavy crude prices by connecting them to the world's largest refining market in the Gulf Coast as they double production by 2025. Environmentalists are trying to block the 830,000-barrel-a-day line because they say it would encourage oil-sands development, which releases more of the carbon dioxide that scientists say is warming the planet than extracting some conventional forms of crude.

Calgary-based TransCanada is the country's second-biggest pipeline operator.

Girling said he expects an environmental report from the State Department to be released in “weeks, not months.” The department continues to ask TransCanada questions about the project, though inquiries have slowed, Girling said. While he sees a final decision by the end of March, he said there is a chance it may be left to the next U.S. administration.

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