Arkansas News - Congressmen criticize delay on Keystone pipeline

News Article

By:  Tim Griffin
Date: May 24, 2012
Location: Little Rock, AR

By Rob Moritz

If work on the Keystone XL oil pipeline does not begin soon jobs could be in jeopardy at a Little Rock plant that makes pipe for the project, two of Arkansas' Republican congressmen warned here today.

Tons of pipe for the planned transcontinental pipeline from Canadian oil fields to refineries on the Texas Gulf Coast are stockpiled at Welspun Tubular while the Obama administration studies the environmental impact of the project.

"We have talked with the folks at Welspun about the impact of the delay in the Keystone pipeline," said U.S. Rep. Tim Griffin, R-Little Rock. "They made no bones about it. If this pipe is not put into the pipeline it will be dumped into the market and will reduce the price, and it will negatively impact jobs here at Welspun, which means layoffs."

Rajesh Chokhani, vice president for Welspun, said later that the company has 506 miles of pipe at its plant ready for shipment while the company awaits government approval for the $7 billion pipeline project.

He said about 300 miles of pipe has already been shipped to the Gulf Coast for the southern leg of the Keystone project that will extend from Cushing, Okla. TranCanada, the company funding the project, announced in February it would build the southern portion first. It did not require State Department approval.

The larger project was sidetracked last year over concerns that the proposed route could threaten sensitive aquifers in Nebraska. After Congress set a deadline for the administration to complete an environmental study, the State Department rejected issuing a permit for the project, saying it was not given enough time to study an alternative route.

In December, Welspun announced it was laying off 60 temporary workers because of the delay. The company has since announced a $100 million expansion of its Little Rock facility, the second since the plant opened in 2009. The plant now employs more than 500 workers.

President Obama has said he will make a decision on whether to proceed with the main Keystone pipeline project after the November general election. The administration has encouraged TransCanada to resubmit paperwork for the necessary permits.

Griffin and Rep. Rick Crawford, R-Jonesboro, toured the Welspun Tubular manufacturing plant today, along with 4th District GOP congressional nominee Tom Cotton, as part of a national effort by House Republicans who are members of the House Energy Action Team.

HEAT members visited domestic energy sources across the nation -- from the Bakken Shale Oil field in North Dakota to the Barnett Shale play in Texas to off-shore oil and natural gas rigs in the Gulf of Mexico -- to promote independence from foreign oil and creation of jobs in the United States.

At Little Rock, Griffin and Crawford accused Obama of playing politics by delay a decision on the Keystone project until after the election and said the delay is hurting companies like Welspun.

"I think the time line will largely be dictated on how long Canada is willing to wait," Crawford said, adding that Canada is considering working with China on the project.