Keystone XL clears final permit hurdle in Nebraska

By Patrick C. Miller | November 21, 2017

By a 3-2 vote, the Nebraska Public Service Commission (PSC) on Monday approved an alternative route through the state for TransCanada’s Keystone XL Pipeline.

Commissioners approved an order giving TransCanada permission to build the $8 billion Keystone XL Pipeline using the Mainline Alternative Route. This route was one of three proposed routes through Nebraska included in TransCanada’s permit application.

Russ Girling, TransCanada president and CEO, said the company was evaluating the PSC’s decision on the 830,000-barrel-per-day pipeline that will carry oil sands crude from terminals in Hardisty, Alberta, to Steele City, Nebraska, where it can then reach refineries along the U.S. Gulf Coast.

"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," Girling said.

Late in 2015, President Barack Obama rejected a permit for the Keystone XL Pipeline after his administration spent seven years reviewing the project. However, within days after being sworn in earlier this year, President Donald Trump signed a presidential memorandum to restart the application process. In March, TransCanada received a presidential permit from the U.S. Department of State to construct the 36-inch pipeline. Nebraska was the final state to approve the project.  

The American Petroleum Institute (API) applauded the Nebraska PSC’s decision to approve the Keystone XL permit, noting that it will provide increased energy security, create 42,000 construction jobs and generate $55 million in tax revenue during its first year of operation.

“The Nebraska Public Service Commission set an example for how to carefully evaluate critical energy infrastructure projects, even in the face of strongly held views and opinions,” said Jack Gerard, API president and CEO. “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.” 

This week, TransCanada is also dealing with the cleanup from a 5,000-barrel leak on the Keystone Pipeline discovered last Friday in Marshall County in northeastern South Dakota. The company said it’s keeping shippers and customers up to date on the situation. The pipeline from Hardisty, Alberta, to Cushing, Oklahoma, and to Wood River and Patoka, Illinois, is expected to remain shut down during incident. The cause of the leak remains under investigation.

TransCanada specialists from emergency management, engineering, environmental management and safety are being assisted by contractors and nationally recognized experts. TransCanada said it’s providing state and federal regulators—including the Pipelines and Hazardous Materials Safety Administration (PHMSA) and the National Response Center (NRC)—with information on an ongoing basis.

Greg Haas, director of integrated energy for Stratas Advisors in Houston, said the oil and gas industry should expect and plan accordingly for continued opposition to pipeline projects from activists, Native America tribes and environmental groups.

“Proponents of new pipelines have to do their utmost to prevent any perceptions of rapid-fire planning or a bad process for the permitting,” he said. “Any sort of shortcuts will be highlighted and politicized. The companies themselves have to operate with white-glove attention so that these events that seem to occur from time to time cannot be used as ammunition against new pipelines to come.”

Hass emphasized that pipeline companies should “anticipate vehement opposition” and operate with care, both in day-to-day operations and in development, permitting and right-of-way acquisitions.

“We’re in a new era for pipeline development,” he said. “I do think that the protests will continue. Concern about the environment is very real and it’s persistent. I don’t see that falling away.”