Nebraskan regulators voted to approve the construction of a portion of TransCanada’s Keystone XL pipeline in the state on Monday, according to emerging reports regarding the project.
The Nebraska Public Service Commission made a 3-2 decision to allow the pipeline, but unsurprisingly, its opponents vow to challenge the decision in courts.
"While we are very pleased with Nebraska's approval, it underscores that Canadian regulators need to keep pace if we are going to build a truly diversified set of markets," Alberta Premier Rachel Notley stated Monday. The pipeline was designed to feed oil from sands in Canada – notably Alberta – to the United States.
While it approved the pipeline work, the commission ruled that the line should be located closer to TransCanada’s existing line in the state to minimize environmental risk and danger to local species.
The decision comes days after a 210,000-gallon leak in South Dakota from a northern portion of the same pipeline. The grasslands are currently being cleaned by a special team funded by Keystone operators.
President Donald Trump approved the project in the early days of his administration, undoing a decision by his predecessor to prevent its construction. Scores of environmentalists had protested the project citing risks to agricultural areas through American heartlands. Related: Can Oil Majors Continue To Beat Estimates?
The existing Keystone pipeline transports crude oil from Canada to refineries in Oklahoma and Illinois, and passes through North and South Dakota, Nebraska, Kansas, and Missouri. Keystone XL is planned to pass through Montana and South Dakota, ending in Nebraska, where it would connect to the existing pipeline network going on to the Gulf Coast.
For Nebraska, the problem is that the pipeline’s route is designed to pass through a fragile ecosystem in the Sandhills region, along with the usual risk of groundwater pollution—a typical and persistent risk with pipelines—although less risky than moving it by rail.
By Zainab Calcuttawala for Oilprice.com
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