TransCanada received its final required pipeline route approval, winning Nebraska’s permission to build its long-delayed Keystone XL crude oil pipeline across the state… just days after a 5,000 barrel spill in South Dakota shut the pipeline.
The decision will almost certainly be challenged in court.
Just a few short days after 210,000 gallons of crude oil spilled in South Dakota, Bloomberg reports that Nebraska’s Public Service Commission voted three to two Monday, removing one of the last hurdles to the Calgary-based company’s construction of the $8 billion, 1,179-mile conduit (1,897-kilometer), which has been on its drawing boards since 2008.
For those who aren’t familiar with the project, the pipeline links Canada’s Alberta oil sands to U.S. refineries. While a portion of the pipeline has been operating, part of it had still not been approved by state regulators… until today’s decision by Nebraska.
However, as Bloomberg notes, the commission approved an alternative route.
Jane Kleeb, president of the environmental advocacy group Bold Alliance, said green-lighting an alternative route may have helped the commission reach a “middle ground solution.”
At the same time it opens new questions that she said her group would explore in federal court. She argued the secondary route wasn’t adequately vetted.
That view mirrored a dissenting opinion filed by Commissioner Crystal Rhoades. She wrote that TransCanada didn’t meet “the burden of proof” in proving that the pipeline is in the state’s public interest, and she said the alternative route needed more study on both the state and federal level. For example, she said, Nebraska’s Department of Environmental Quality didn’t analyze the alternative route at all in its 2013 report.
“It is clear” TransCanada “never intended it to be considered,” Rhoades said.
In its post-hearing brief, TransCanada told the panel its “preferred route was the product of literally years of study, analysis and refinement by Keystone, federal agencies and Nebraska agencies,” and that no alternate route, even one paralleling the Keystone mainline as the approved path does, was truly comparable.
TransCanada’s share price is up on the news…
Notably, with Nebraska’s go-ahead in hand, TransCanada still must formally decide whether to proceed with construction on the line, which would send crude from Hardisty, Alberta, through Montana and South Dakota to Nebraska, where it will connect to pipelines leading to U.S. Gulf Coast refineries. The company’s open season for gauging producers’ interest closed late last month, and TransCanada executives have indicated that they’ve secured enough shipping commitments to make the project commercially worthwhile.