TransCanada gives heads up on second Keystone XL try

2012-02-28T06:00:00Z 2012-05-04T11:10:36Z TransCanada gives heads up on second Keystone XL tryBy ART HOVEY / Lincoln Journal Star JournalStar.com
February 28, 2012 6:00 am  • 

TransCanada offered written confirmation  Monday of its plans to re-apply for a presidential permit to build the Keystone XL pipeline through Nebraska.

In a letter to the U.S. State Department, an attorney for the Calgary-based company said its leadership intends to file the necessary paperwork "in the near future."

A part of that plan is "to supplement that application with an alternative route in Nebraska, as soon as that route is selected."

The letter follows through on an earlier TransCanada promise to go forward and could signal an end to the weeks of uncertainty that followed President Barack Obama's denial of a permit for the project in January.

At that time, the president said he was rejecting the application because House Republicans had demanded action within 60 days. In a statement released later Monday, a White House spokesman reiterated that Obama was open to a new timetable once the new Nebraska route had been determined.

"We will ensure any project receives the important assessment it deserves," the statement said, "and will base a decision to provide a permit on the completion of that review."

TransCanada's proposed 1,700-mile, $7 billion connection between oil deposits in Alberta and refineries along the Gulf Coast already has been under federal scrutiny for more than three years.

Opposition from Nebraska landowners and environmental groups worried about groundwater contamination and erosion in the Sandhills is one reason why.

Those concerns also led to a special session of the Legislature last year and to a promise from TransCanada to go around the Sandhills.

But state action on an alternate route hit a snag when the State Department failed to offer a memorandum of understanding on that process.

A bill (LB1161) pending in the Legislature's Natural Resources Committee, offered by Sen. Jim Smith of Papillion, would eliminate the need for that memorandum, a TransCanada spokesman said.

"That legislation is important," said Shawn Howard, "because it would let the Nebraska Department of Environmental Quality move ahead with the review that they've already started."

Jane Kleeb, executive director of Bold Nebraska and a leader of opposition to the project, continues to argue that the Smith bill is off target, because another outcome of the special session requires that any new pipeline applications be routed to the Nebraska Public Service Commission.

Kleeb said the PSC doesn't have a regulatory framework in place yet to act on petroleum pipelines and won't have for months.

In the meantime, "are we really going to spend $2 million on a study for a pipeline that may never be built?"

Howard said DEQ should finish the job it's already started. "They're the ones that are best equipped right now to handle it."

The DEQ review is expected to take six to nine months, he said.

"They've already started, and they've gotten some good front-end work out of the way. But having the route in Nebraska finalized is a key to the Keystone XL application we will refile, because, without that, the State Department is not in a position to make a national interest determination."

In a related development, TransCanada said  Monday that it would proceed with construction of a 478-mile portion of Keystone XL that would connect the southern portion of the project from Cushing, Okla., to the Gulf Coast.

Because that part of the project doesn't cross an international border, there would be no need for further review by the State Department, Howard said. "This is now a stand-alone project."

The U.S. Army Corps of Engineers would be "the main federal agency" on that segment, Howard said, because it handles river crossings and similar details.

The White House statement welcomed the stand-alone news, noting there is a "bottleneck of oil in Cushing" at a time when domestic oil production is at an eight-year high.

Kleeb acknowledged the influence of rising pain at the gasoline pumps for drivers.

"Everybody is talking about gas prices," she said, "and everybody brings up the fact of a glut of oil at Cushing, Okla."

Cushing is a current delivery point for oil from TransCanada's first Keystone project, which began pumping oil through eastern Nebraska in 2010.

The northern portion of Keystone XL is scheduled to intersect with Keystone near Steele City.

Reach Art Hovey at 402-473-7223 or at ahovey@journalstar.com

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