State Dept. said to be weighing altering Keystone XL route

The U.S. State Department is weighing whether to seek a rerouting of TransCanada Corp.’s planned $7 billion Keystone XL pipeline away from the Sandhills region of Nebraska, a department official said.

The department is considering how to respond to concern among Nebraska citizens and public officials about the risk that TransCanada’s current plans may pose to the Sandhills, said the official familiar with the deliberations, who spoke on condition of anonymity yesterday about internal discussions.

Nebraska residents expressed opposition to the route during State Department hearings on the pipeline, calling it a threat to drinking-water supplies, and the department believes it must now consider how to be responsive to them, the official said. The state legislature is currently in a special session weighing measures to force a rerouting of the project.

The State Department, which has jurisdiction because the project crosses an international border, hasn’t made a decision on whether to require examination of a new route, the official said.

Nebraska State Senator Annette Dubas, who participated in negotiations with TransCanada and asked the company to change the route, said the department is listening to her state.

When the department hosted hearings in Nebraska in September, officials assured them that no decisions had been made and promised to take their concerns into consideration.

“This demonstrates that they are doing that,” Dubas said.

Drinking Water

The 1,661-mile pipeline would deliver 700,000 barrels a day of crude from Alberta’s oil sands to the Gulf of Mexico by crossing Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

The Sandhills are made up of dunes that rise as much as 300 feet. Underneath them flows the Ogallala aquifer, which supplies drinking water to 1.5 million people.

The aquifer isn’t at risk and “the route that has been selected is the most environmentally responsible and has the least impact to the land the pipeline will go through,” Terry Cunha, a TransCanada spokesman, said in an e-mail yesterday. He didn’t immediately provide a response to requests for further comment on the State Department weighing a rerouting.
Risk to Project

Russ Girling, chief executive officer of Calgary-based TransCanada, has said rerouting delays might kill the project.

Nebraska Governor David Heineman said in an interview on Bloomberg Television yesterday that he’d support the pipeline if it were moved away from the Ogallala aquifer. Nebraska lawmakers began committee hearings yesterday in Lincoln, the state capital, on five bills aimed at giving the state the power to reroute pipelines.

The State Department’s interest in the concerns that have surfaced is an encouraging sign, Senator Ken Schilz said in an interview after a full day of hearings.

“As we’ve gone through this process, we’ve always been under the assumption that it was up to the State Department to take on this decision,” Schilz said.

President Barack Obama acknowledged Nebraska’s concerns last week, saying in an interview with KETV, an Omaha television station, that jobs created by the project wouldn’t be worth it if drinking-water supplies were at risk.

“Folks in Nebraska, like all across the country, aren’t going to say to themselves, ‘We’ll take a few thousand jobs if it means our kids are potentially drinking water that would damage their health,” Obama said in the Nov. 1 interview.

‘Less Secure’

The fate of the pipeline has grown “less secure,” Whitney Stanco, an analyst with MF Global’s Washington Research Group, said in a note to clients yesterday.

“The odds favor approval, but an extended delay is looking more and more possible,” she said.

Rerouting the pipeline wouldn’t resolve objections to the project from environmentalists, thousands of whom encircled the White House in a protest on Nov. 6. Groups such as Friends of the Earth also oppose the pipeline because they say extracting crude from Canada’s oil sands produces more greenhouse-gas emissions than conventional oil drilling.

In August, the State Department issued a final environmental impact statement saying the project will cause “no significant” environmental damage provided that TransCanada complies with U.S. law.

That study was based on criteria that were focused more narrowly than the “national interest” determination that department officials are now preparing, the official who requested anonymity said.

The department has said it expects to make its decision this year.

4 Comments

  1. NoWhining

    State Department ??? — decide on the commerce issues — please. The Dept does NOT have a mandate to look at everything again. Libs and Obama — lets bring activism to the law.
    Stopped in 2010. 2012 time to end this bad experiment in government.

    #1
  2. Dollar

    Maybe if they delay it long enough, they won’t be the ones forced to make the political decision.

    If not for politics, this pipeline would have already been built.

    Our system of government is failing.

    #2
  3. bg

    It would be humorous if it was not a statement about Bloomberg reporters writing from anti-XL non-profit “fact” sheets and tweets. These are strictly scare tactics to convince earth science illiterate Nebraskans that their drinking water is threatened. Nebraskans should be more concerned about agricultural chemicals like atrazine detected in groundwater across the state. But when do the facts matter when it is all about keeping the story alive in a election cycle. Green groups spin this in their war rooms as a environmental bellwether for the administration and hoping ultimately that Transcanada will throw in the towel. A reroute proposal at this late game will kill the project and painting it as a risk reduction is tantamount to a lie.

    BTW who cares what Whitney at a derivatives brokerage firm says about a pipeline project–is this supposed to be funny or was it to add some legitamacy to a planted story.

    #3
  4. Jim

    No mention that the Canadians are engineering two other pipeline routes within Canada. One would take the crude to the east to supply markets in Ontario and Quebec, which is looking more attractive, and the other to the west to the B.C. coast where it could be shipped out to the Far East. The U.S. is going to twiddle long enough to eventually lose this vital supply.

    #4