VANCOUVER (miningweekly.com) – Oil and gas pipelines operator TransCanada is reviewing a decision by the Nebraska Public Service Commission (PSC) approving an alternative route for the proposed Keystone XL (KXL) pipeline project through the state.
"As a result of today's decision, we will conduct a careful review of the PSC’s ruling while assessing how the decision would impact the cost and schedule of the project," said TransCanada president and CEO Russ Girling in a statement on Monday.
The PSC weighed three routes proposed by TransCanada, known as the Preferred Route, the Sandhills Alternative Route and the Mainline Alternative Route, and concluded that the Alternative Mainline Route through Nebraska was in the public interest and would be approved.
All three routes proposed to enter Nebraska in Keya Paha county and end at Steele City, in Jefferson county. The Sandhills Alternative Route is the westernmost of the three proposed routes and represented the original proposed route of the KXL pipeline through Nebraska. This was previously rejected, and therefore the PSC did not entertain the proposal again.
The Preferred Route reflects the shortest possible route between Hardesty, Alberta, to Steel City, Nebraska, and was previously approved by the Nebraska Department of Environmental Quality (NEDQ) and the Nebraska governor to the east of the Sandhills Alternative Route. However, the PSC concluded that the Preferred Route failed to take advantage of any opportunity to co-locate with the existing utility corridor represented by Keystone I, and therefore rendered the commission unable to conclude whether the route was in the public interest.
The Mainline Alternative Route follows the same route as the Preferred Route for the portion in Northern Nebraska before it diverts further east through Madison county, to meet up with the Keystone I pipeline in Stanton county. It then turns south, co-locating with Keystone I for the remainder of the route to Steele City. With the Alternative Mainline Route, the KXL pipeline would co-locate near the Keystone I Mainline Route for about 160 km, for a total route length of 451 km long, which is only 8 km longer than the Preferred Route.
“We see many benefits to maximising the co-location of the KXL Pipeline with Keystone I. It is in the public interest for the pipelines to be in closer proximity to each other, so as to maximise monitoring resources and increase the efficiency of response times. This would also assist emergency responders and others that may be called upon to assist with any issues that may arise with either pipeline,” the PSC said in its report.
The Alternative Mainline Route also impacts on fewer kilometres of the ranges of threatened or endangered species, and also comprises fewer crossings of farmland, rivers and other infrastructure, such as state highways and natural gas facilities.
Keystone cited the 8 km longer route and one additional pumping station as negatives, but the PSC ruled that benefits of the co-location opportunity using the existing utility corridor outweighed those concerns.
TransCanada had argued that the KXL would strengthen US energy security and was in the national interest. The project is considered an important new piece of US infrastructure that will secure access to an abundant energy resource produced by a neighbour that shares a commitment to a clean and healthy environment.
“Several studies have shown that pipelines are a safer and more environmentally sound way to transport oil to market than trains, and KXL raises the bar on both fronts," according to Girling.
During the first quarter, TransCanada received a US Presidential Permit from President Donald Trump for the Keystone XL pipeline, and Nebraska regulatory approval was one of the last remaining permitting hurdles, while the company was progressing commercial discussions with its customers.
The $8-billion KXL project will be subject to enhanced standards and utilisation of the most advanced technology.
Independent forecasts by the US Department of State estimate that KXL will support tens of thousands of direct and indirect jobs and associated income during construction and will contribute about $3.4-billion to US gross domestic product.
TransCanada, which is active in 38 US states, committed to working productively with all stakeholders and tribal leaders as this project moved forward. During construction in Nebraska, South Dakota and Montana alone, KXL will generate hundreds of millions of dollars in employee earnings as well as tens of millions of dollars yearly in local tax revenues, providing funds for local infrastructure spending.
The KXL was designed to link existing pipeline networks in Canada and the US to bring crude from Alberta and North Dakota to refineries in Illinois and, eventually, the Gulf of Mexico coast. The proposed project entails a 1 897 km, 36-inch-diameter crude oil pipeline, beginning in Hardesty, Alberta, Canada, and extending south to Steele City, Nebraska, in the US.
The infrastructure project is seen as critical to narrowing the discount crude producers in the Alberta oilpatch receive over their southern rivals.
Meanwhile, TransCanada is responding to an oil leak of about 5 000 bbl of oil from the existing Keystone I line, in Amherst, South Dakota, which started early on Thursday morning.
The pipeline has been shut down and TransCanada advised that it has about 150 staff on the ground to clean up and remediate the oil spill. The section of pipe along a right-of-way about 56 km south of the Ludden pump station in Marshall County, South Dakota, was completely isolated within 15 minutes and emergency response procedures were activated.
Following the oil spill, nongovernmental organisations ramped up their rhetoric against the KXL expansion. The Sierra Club issued a statement threatening an aggressive legal strategy to push for cleaner energy alternatives in Congress.
“While the Nebraska PSC let us down, we are winning Nebraskans' hearts and minds. A poll commissioned last month showed that more than half of the state's voters oppose KXL, citing concerns about drinking water contamination and the threats Keystone would pose to endangered species,” Sierra Club director Kelly Martin said in a release.
Martin added: “And the Nebraska PSC didn't give TransCanada exactly what they wanted – instead, they approved an alternative route for the pipeline, one which TransCanada has called unworkable. This new route means the company faces even more hurdles, making our legal opposition even more important.”