As Congress passes Keystone, TransCanada objects to EPA's criticism

TransCanada Corp.has written to the U.S. State Department to dispute the Environmental Protection Agency's latest criticism of the stalled Keystone XL pipeline project.

The Republican-controlled U.S. Congress passed a bill approving the Keystone XL oil pipeline on Wednesday.

It will nowland on the desk of U.S. President Barack Obama, who has vowed to veto it over climate change concerns.

The company takes issue with the EPA report, which said the recent drop in oil prices will increase Keystone's contribution to greenhouse gases and climate change.

The EPA reasoned that building the pipeline to carry oil to the U.S. Gulf Coast would enable Canadian companies to further develop the oilsands, which cause greater emissions of greenhouse gases than conventional oil.

• Keystone pipeline's impact on global warming should be reviewed: EPA
• 5 Keystone XL pipeline hurdles still ahead

Among other things, TransCanada says the EPA's conclusions aren't supported by the State Department's analysis or by actual market prices and production rates since the company first applied for approval in 2008.

The EPA argued that today's oil price of about $50 a barrel is not high enough to make oilsands development viable, without a pipeline to reduce the cost of transportation.

TransCanada CEO Russ Girling suggested last week that the EPA's latest objection is a delay tactic, since oilsands will still be developed even at $50 a barrel and oil will be delivered to U.S. markets by rail if not by pipeline.

The pipeline has exposed divisions in the U.S. between environmentalists concerned about global warming and potential oil spills against supporters who argue that the $8-billion USproject will create jobs and boost U.S. energy security. One of the measures added to the bill by the Senate states that climate change is not a hoax, which could make some conservative Republicans think twice.

"We're going to continue to keep our promise to the people by finishing our work on the Keystone pipeline," House Speaker John Boehner of Ohio said Wednesday before the vote. Boehner said the president was listening to "left-fringe extremists" rather than the American people.

"The president needs to listen to the American people and say 'yes, let's build the Keystone pipeline,"' Boehner said.

The pipeline is the first of many standoffs expected between Obama and Republicans on energy and environment.