Five things to watch in the new Keystone fight
Nebraska’s approval of the Keystone XL pipeline was a key step in supporters’ years-long fight to build the controversial project.
But the decision raised fresh questions about the future of the pipeline, which is still many regulatory and legal decisions away from the getting the final green light.
Here’s what to watch as the debate over the $8 billion, 830,000-barrel-per-day Keystone XL pipeline moves forward.
Developers need more permits
Nebraska’s decision Monday to approve the pipeline route was a landmark moment in the Keystone saga, but it’s not the final time regulators will decide the pipeline’s fate.
The Bureau of Land Management needs to issue a permit allowing pipeline construction on a small swatch of federal land along its path, said Sierra Club senior attorney Doug Hayes. The Army Corps of Engineers also has to authorize its construction over waterways along the route.
The Trump administration has aggressively supported the Keystone proposal, issuing a presidential permit in March allowing the pipeline to cross the U.S.-Canada border.
Moving Keystone forward is one of the first-year accomplishments President Trump most likes to bring up, raising the possibility developer TransCanada gets the final federal permits it requires.
Montana and South Dakota have previously issued permits allowing construction of the pipelines in their states. That made Nebraska a last-ditch spot for opponents of the project to influence regulators: officials held public meetings on the pipeline and considered 500,000 comments before approving the project.
Legal challenges are on the horizon
Opponents have tried to raise legal barriers to Keystone on both the state and federal level.
Tribes and landowners that oppose the pipeline are still suing over South Dakota’s decision to grant construction permits to developers. Their lawsuit is pending before that state’s Supreme Court.
On the federal level, a coalition of environmental groups want the courts to reconsider Trump’s permitting decision, arguing the State Department relied on an outdated environmental review when issuing the cross-border permit.
A federal judge on Wednesday rejected a request from TransCanada and the Trump administration to dismiss that lawsuit, meaning the court is likely to review the State Department’s environmental assessment.
Nebraska’s decision is also subject to legal challenges, something opponents have promised to pursue.
The pipeline has a new route
A key question is how the route selected by the Nebraska Public Service Commission affects existing permits for the pipeline.
Nebraska commissioners did not approve TransCanada’s preferred route for Keystone XL, instead choosing a map that moves its route through the state eastward.
Opponents of the pipeline say that decision raises a host of questions about previous permitting decisions.
“It creates certain challenges on the state and federal level in terms of further environmental review, changes to the easements, and everything else,” Hayes said.
For one, greens hope federal courts will knock down the presidential permit because the new Nebraska route hasn’t gone through an environmental review. The State Department itself acknowledged this week that it’s reviewing the project.
“We have heard about a possible modified route, and we are in the process of gaining more precise information in order to determine if there will be any permitting impacts as a result of those changes,” a spokesperson said Monday.
TransCanada also has a big decision
Besides regulatory and legal deliberations, TransCanada is undertaking an economic one, as well.
Company officials have said they’re now reviewing whether there’s still enough of a demand for the pipeline to make it worth building.
“Overall, we expect support for the project to be substantially similar to that which existed when we first applied for the Keystone pipeline permit,” CEO Russ Girling said on an earnings call earlier this month.
“TransCanada and its shippers continue to believe that the U.S. Gulf Coast is the largest and most attractive market for growing volumes of Canadian heavy oil, and we also believe that the Keystone XL pipeline is the safest, most efficient and most environmentally sound way to move that crude oil from western Canada to the U.S. Gulf Coast.”
The company expects to conclude its economic analysis next month. Industry experts support the idea there is still a demand for the pipeline.
Zachary Rogers, an analyst for Woods McKenzie, said this week that the global oil market, including declining production in Mexico and political uncertainty in Venezuela, still makes Keystone a viable project.
“Nebraska’s decision … greatly diminishes the political risk for the project, likely clearing the way for increased volumes of West Canadian heavy crude to reach the Gulf Coast,” he wrote in an analysis.
Opponents are energized
Keystone XL has been a touchstone of the environmentalist and anti-fossil fuel movements for years, and many opponents of the project declared temporary victory when the Obama administration rejected it in 2015.
But Trump’s revival of the project and Nebraska’s approval of it have reignited popular opposition to the pipeline, with activists vowing to use public pressure and protests to prevent Keystone XL from going forward.
After Nebraska’s decision on Monday, a group of environmental and indigenous groups released a new plea, seeking volunteers to protest against Keystone along its route through the plains “likely next spring.”
That means the prospects are good for the type of massive protests that greens have deployed previously against Keystone and other controversial pipelines like Dakota Access.
The question this time is: How big will the protests be?
“We honestly don’t know if we can hold the line against Keystone XL forever,” organizers wrote in an open letter to would-be protesters.
“But we know that we have a chance, and that if we make a stand now it will improve our odds in a thousand other similar fights happening now and in the years ahead.”