TransCanada has signed contracts with U.S. oil suppliers to carry Bakken shale oil in the Keystone XL pipeline. Suppliers in North Dakota and Montana have signed contracts to send 65,000 barrels a day down to Oklahoma alongside TransCanada's tar sands oil. TransCanada will thus spend $140 million to build a five-mile link to a big oil hub at Baker, Montana. The Bakken deal should make it easier for TransCanada to demonstrate it is a common carrier and beat back the eminent domain challenge filed last week in Oklahoma.
TransCanada spokesman Jeff Rauh says its Keystone system can displace 20% of our OPEC imports. The Washington Post cites an Energy Department analysis that finds the U.S. can get all the Canadian crude oil it needs over the next decade without Keystone XL. Alas, that same report also notes that blocking Keystone XL won't stop tar sands production, as Asia would soak up demand (though some of us wonder if China will be the buyer anyway).
But TransCanada's Keystone XL is arousing increasing opposition in the U.S. The same Washington Post article cited above focuses on the anti-pipeline grassroots activism TransCanada has sparked up and down the Great Plains. The Los Angeles Times notes that TransCanada has even drawn the ire of Texas landowners, who don't appreciate TransCanada's heavy-handed land-acquisition tactics. Texans working with the Sierra Club to protest an oil pipeline---that might be a sign of the Apocalypse.
TransCanada is even catching some fictional flack. Rapid City novelist Lori Armstrong has just published Mercy Kill, a mystery novel in which proponents of a fictional Canadian oil pipeline turn to violence to intimidate West River landowners into cooperating. This is fiction, not history, but the novelist and activists see the novel's potential to educate readers as to the burdens placed on landowners by pipelines like the Keystone system.
By the way, I still haven't caught news about what TransCanada has found in the six sites it had to dig up in South Dakota as it checked "expansion anomalies." Stay tuned....
Update 11:30 CST: For those of your thinking the Keystone XL pipeline will increase supply and decrease prices here in the Midwest, think again. In 2008, a report commissioned by TransCanada itself found that the Midwest is oversupplied and that Keystone XL will allow TransCanada to raise the price of oil by $3 a barrel.