TransCanada Corp. shares were up all of one cent (full disclosure: As a shareholder, I am now a dollar richer) on Friday afternoon after the U.S. State Department gave a thumbs up to the company's proposed Keystone XL pipeline project. The project had been under intense scrutiny, mostly out of environmental concerns if there was a leak, with opponents protesting in front of the White House this week.
In its report on the project, though, the department downplayed the environmental risks: "The analyses of potential impacts associated with construction and normal operation of the proposed project suggest that there would be no significant impacts to most resources along the proposed project corridor."
According to Bloomberg News, supporters of the project – which include the oil industry, 14 senators and four unions – believe that the 4,346-kilometre Keystone pipeline would generate $20-billion (U.S.) in spending and create 118,000 jobs, not to mention giving the U.S. a supply of 500,000 barrels a day of bitumen from the Canadian oil sands to refiners in Oklahoma and Texas.
So why the indifference in the share price? For one, the State Department's view, while important, doesn't mark an end to the controversy. Secretary of State Hillary Clinton must still weigh in with her approval. The project also faces public hearings and the views of other government agencies, hurdles that will likely delay an official green light ceremony until the end of the year.
As well, my colleague Shawn McCarthy pointed out on Thursday that TransCanada was already gearing up to begin construction on the project, anticipating a favourable review from the Statement Department.