U.S. CHAMBER OF COMMERCE

Keystone XL Update

By Matthew Koch

Although the Keystone XL pipeline has been out of the public eye for a number of months, TransCanada has been working in Nebraska to obtain state approval of the pipeline following the federal government’s decision to endorse the project. As you will recall, Keystone XL was first proposed in 2008, but delayed for years and eventually rejected by the Obama Administration. The Trump Administration reversed that decision.  You may have seen some news about Keystone XL recently.  Here is what is happening:

Project details:

  • 36-inch underground pipeline
  • Approximately 1,200 total miles; 875 miles in Montana, South Dakota, and Nebraska
  • Can deliver up to 830,000 barrels of Canadian and U.S. oil products daily

What Happened:  On November 20, the Nebraska Public Service Commission (PSC) approved a route and issued a permit to TransCanada, allowing them to build Keystone XL.

Why It Matters:  The Nebraska PSC was the last government agency that needed to approve the project.  Montana and South Dakota already issued their approvals, and the Trump Administration granted the federal cross-border Presidential permit in April.

The Catch: The Nebraska PSC didn’t approve TransCanada’s preferred route – it approved a different, alternative route for the pipeline through the state. The new alternative route is similar in length, yet much of it is located east of the preferred route, and along the corridor of the existing Keystone pipeline (completed in 2010).

What Is Next: TransCanada has not made the final decision to build the pipeline. The company has asked Nebraska PSC regulators to reconsider their choice of an alternative route for the project. In the meantime, the company is continuing to study the implications of the PSC's decision, and is evaluating market conditions and other business considerations. Opponents say the company will need to secure new permits from the federal government if they decide to build along the new route. Additionally, opponents hope that a pending lawsuit in the U.S. District Court in Montana will further derail the project. The suit contends that the Trump Administration’s approval of Keystone XL did not adhere to proper federal environmental laws and processes.

The Bottom Line:  Even with increased U.S. production, America is still importing crude oil. The Keystone XL pipeline will allow both Canadian and American oil to move more efficiently to U.S. refineries. Despite a recent spill in the existing Keystone pipeline, pipelines overall have an excellent safety record and are the safest method of transporting large amounts of oil. It remains to be seen what TransCanada will decide, but the Keystone XL has been subjected to years of review, and has met the criteria for approval.