After nine months of seeking approval from the Nebraska Public Service Commission (PSC) for the final step in the permitting process of the Keystone XL pipeline, it was approved by a 3-2 vote earlier this week. TransCanada Corp, the project’s sponsor, will assess the decision and impacts on construction cost and schedule before commenting further. Environmental and tribal representatives opposed to the pipeline vow they will continue to fight.
The Keystone XL (KXL) is a 36-inch, 1,179 mile pipeline proposed to carry crude oil from the sand oils from Hardisty Alberta to Steele City Nebraska, which will then connect with pipeline to carry it down to Texas refineries. The project, proposed in 2008, was subject to interagency environmental reviews and had many environmental impact statements issued by the State Department before President Obama rejected it in 2015. In March 2017, President Trump endorsed TransCanada’s proposal. Montana and South Dakota approved the proposal, while Nebraska held public meetings and accepted public comment before the PSC’s final vote. The vote allowed for an alternative route to limit disturbance in the ecologically fragile Sand Hills area.
Appeals of the PSC decision are required to be filed within 30 days. Ongoing federal litigation with environmental groups opposing the construction of the pipeline continue. TransCanada will need federal approvals from the Army Corp of Engineers and Bureau of Land Management before construction can begin. If built, the project will provide thousands of construction jobs, tax revenue, and lower fuel prices. Analysts shared different opinions on the project. “While today’s Keystone XL pipeline approval is an important milestone, it does not provide certainty that the project will ultimately be built and begin operating,” said Gavin MacFarlane, a vice president at Moody’s Investors Service. Zachary Rogers, research analyst for Wood MacKenzie’s refining and oil markets, stated the project’s commercial viability is strengthened with decreased heavy oil production in Mexico and Venezuela affecting the heavy-crude market in the Gulf Coast. TransCanada has said it has received adequate support to make the pipeline viable, but it has yet to announce results of its open season to gauge interest among shippers, as they analyze demand.