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Energy Law Exchange

December 6, 2017

Nebraska Approves Route for Keystone Pipeline XL

On November 20, 2017, the Nebraska Public Service Commission (PSC) approved a route for the Keystone XL Pipeline (Pipeline) to pass through Nebraska. Although the approval is a significant milestone for the Pipeline and the company that plans to build it (TransCanada Corporation (TransCanada)), the approved route is not TransCanada’s preferred route, and continuing legal and other issues present additional obstacles for the Pipeline.

 As previously reported, the proposed Pipeline would transport crude oil nearly 1,200 miles from Alberta, Canada to Nebraska and connect with existing pipelines in the United States. According to TransCanada, the Pipeline “is expected to support thousands of jobs and billions of dollars in earnings for U.S. workers.” TransCanada first applied for a permit from the U.S. President to build the Pipeline in 2008, and the Obama Administration eventually rejected the request in November 2015In January 2017, President Trump issued a Presidential memorandum inviting TransCanada to resubmit its request for a Presidential permit to build the Pipeline. TransCanada resubmitted its application, and the Trump Administration granted the permit in March 2017.

 Meanwhile, TransCanada filed its route approval request with PSC in February 2017. After years of approval processes, law suits, and other hurdles, the PSC’s approval was seen as the “final hurdle” for the Pipeline’s construction. The route that the PSC approved, however, was not TransCanada’s preferred route. Instead, the PSC approved a “more costly alternative that would add 5 miles (8 km) of pipeline, along with an additional pumping station and related transmission lines,” and the approved route reportedly “shifts [the Pipeline] further east away from sensitive ecological areas.”

 TransCanada responded to this approval by filing a motion with the SPC to “address some questions” in the approval. TransCanada clarified that it is not seeking to change the SPC’s approved route, but it “continue[s] to review the decision and its impact on the cost and schedule on the project.” Landowners in Nebraska that oppose the Pipeline also filed a motion regarding the PSC’s approval because, they argue, the PSC “rejected the only route under consideration, the ‘preferred route’ of TransCanada, and that a new application must be submitted to proceed with the alternative route.”

 This twist in the approval process could create additional obstacles for the Pipeline. The PSC may hold hearings and must decide on the motions, and – according to one report – “State and federal officials said it was unclear if the route required any permits in addition to those already secured for the preferred route.” Months before the PSC’s decision, TransCanada stated that it would make its final decision on whether to go ahead with the Pipeline by December 2017. The company certainly will consider the PSC’s alternative route and other obstacles as it makes its decision, and the developments over the next few months will be crucial in determining the future of the Pipeline.