Nebraska Governor Approves Amended Keystone XL Pipeline Route

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Researched by Industrial Info Resources (Sugar Land, Texas)--On Tuesday, Gov. Dave Heineman of Nebraska signed off on the proposed route for the portion of the controversial Keystone XL Pipeline that runs through the state. In a letter to the White House, Heineman said that the new route of the pipeline proposed by operator TransCanada Corporation (NYSE:TRP) (Calgary, Alberta) would have minimal environmental impact on Nebraska.

One of the most controversial aspects of the pipeline, which would carry oil 1,700 miles from the oil sands region of Alberta to Cushing, Oklahoma, and on to the Texas Gulf Coast, was the initially proposed route through Nebraska. The pipeline would have run through the state's Sandhills region, an environmentally sensitive area consisting of highly erodible sand dunes anchored by various plants and prairie grasses.

The Obama administration's past decisions regarding Keystone XL have outraged supporters of the pipeline, which requires U.S. State Department approval because it crosses an international border. In November 2011, the State Department said that 12 to 15 months would be needed to review alternate routes for the pipeline, highlighting Nebraska as one the key areas for consideration. The decision effectively delayed possible approval of the project until after the 2012 election. For additional information, see November 14, 2011, article - Decision on Keystone XL Crude-Oil Pipeline Delayed Until After 2012 Presidential Elections.

However, in December 2011, Congress forced President Obama's hand on the issue, requiring the administration to make a final decision on the project as part of a "must-pass" bill, involving unemployment benefits and payroll tax reduction. Obama denied the pipeline proposal, saying the "rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline's impact, especially the health and safety of the American people, as well as our environment." Obama said that the denial "is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people." For additional information, see January 24, 2012, article - As Keystone XL and Northern Gateway Pipelines Stall, Other Projects Ready to De-Bottleneck Cushing.

Gov. Heineman's approval of the new Keystone XL route places approval of the pipeline firmly on the shoulders of the Obama administration. In response to the governor's approval, the State Department said that it would probably not reach a decision on the pipeline until after March. "We don't anticipate being able to conclude our own review before the end of the first quarter of this year," said a State Department spokeswoman.

A portion of the Keystone XL project running from Cushing, Oklahoma, to the Texas Gulf Coast did receive approval from the administration and has proceeded with construction to help alleviate the oil transportation bottleneck in Cushing. Named the Gulf Coast Project, this $2.3 billion pipeline will be able to transport up to 700,000 barrels per day (BBL/d) of crude oil when it commences operations next year.

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