Keystone XL pipeline clears major hurdle

Keystone XL pipeline clears major hurdle
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Developers of the Keystone XL pipeline secured approval Monday for the pipeline to run through Nebraska, clearing a key hurdle in the years-long fight to build the project.

The decision came after a rupture in TransCanada’s Keystone system spilled an estimated 210,000 gallons of oil in South Dakota last week, an incident that rankled opponents of the XL expansion.

Nebraska regulators approved plans for Keystone XL to cross the state, though the approval didn't cover TransCanada's preferred route through the state. The commission voted 3-2 to move the project forward.

The approval comes eight months after President Trump issued a presidential permit for the $8 billion, 860 barrel per day project.


Nebraska’s decision is not the last work on the project, but it is one of the last major hurdles remaining for the project.

Only the Trump administration has to issue permits for the pipeline now, though several permitting decisions — including Nebraska's — are subject to legal challenges. TransCanada itself still has to decide whether to build the pipeline, an economic question that is far from settled.

TransCanada said in a brief statement that it is evaluating the Nebraska regulators' decision to approve the pipeline route that the company did not favor.

"As a result of today's decision, we will conduct a careful review of the Public Service Commission's ruling while assessing how the decision would impact the cost and schedule of the project," TransCanada CEO Russ Girling said in the statement.

Keystone has long been a flashpoint for anti-fossil fuel activists, who have rallied environmentalists, tribes and local landowners against the pipeline. TransCanada plans for the pipeline to transport oil from Alberta, Canada, to existing infrastructure in Nebraska, where it will then travel to refineries.

The Obama administration in 2015 blocked TransCanada’s application for a presidential permit, something the project requires because it crosses the border with Canada. That decision effectively stalled the project.

But Trump revived the pipeline earlier this year, signing an executive order fast tracking its reconsideration. In March, he approved the presidential permit, kickstarting a new debate over the project.

Trump often highlights his decision to revive the project as a key accomplishment of his first year in office.

Regulators in Montana and South Dakota, the two other states Keystone XL would cross, have already approved the pipeline, making Nebraska the last major backstop. The Public Service Commission held a series of hearings on the matter this year and considered more than 500,000 comments on the proposed route across the state.

“It’s been a long path to today’s approval and the Commission should be commended,” said Jack Gerard, the president of the American Petroleum Council oil industry group.

“Pipelines such as this enhance our ability to safely deliver North American energy to our world class refineries, which in turn provide the fuels and products we all rely on every day.”

Only one commissioner spoke for or against the project on Monday.

Crystal Rhoades, an Omaha-area commissioner, questioned the economic impact of the pipeline on Nebraska and warned that a spill from the pipeline would impact environmentally sensitive areas of the state. She also said it could violate the rights of landowners in the state.

The commission’s decision is a legal decision subject to appeal, something opponents of the pipeline have said they will do. Developers still need to secure approval from two federal agencies, and permitting decisions in South Dakota and federally are the subject of environmentalist and tribal lawsuits.  

“Regardless of the Public Service Commission’s decision today, millions of people across the country will continue to speak out and demand that the Keystone XL project never gets built,” Michael Brune, the executive director of the Sierra Club, said Monday.

“It is disappointing that the Public Service Commission sided with a foreign oil company over the interests of American communities who would be threatened by this pipeline, but we remain confident that Keystone XL will never be built.”

Thursday’s spill from a sister pipeline added a late twist to the Keystone XL saga.

TransCanada’s Keystone pipeline spilled about 210,000 gallons of oil in rural South Dakota on Thursday, with the pipeline shutting down for repair and cleanup work.

Environmentalists hammered TransCanada for the spill and warned that it previewed potential spills from the larger Keystone XL project. But Nebraska law bars commissioners from considering the threat of an oil spill when permitting pipelines, because spill prevention and cleanup is a federal issue rather than a state one.

Despite the Monday approval, TransCanada still has not made a final decision to build Keystone XL.

Company executives told investors earlier this month that they would make a final investment decision in the coming months, based largely on Nebraska’s decision and on whether there is enough interest from oil companies who would be potential customers.

“I think we let those two events play out and that will give us greater visibility into our final investment decision,” Paul Miller, president of the company’s pipelines business, told investors.

“We’re quite encouraged with the results that we’ve seen.”

—Updated at 12:53 p.m.