TransCanada submits new Keystone XL permit application

TransCanada Corp. has submitted a new Presidential Permit application to the US Department of State for its Keystone XL Pipeline from the US-Canada border in Montana to Steele City, Neb. TransCanada will supplement that application with an alternative route in Nebraska as soon as that route is selected.

TransCanada described the application as building on the more than 3 years of environmental review already conducted for the pipeline and voiced its hopes that processing would processed expeditiously once a decision is made on a new Nebraska route. The application includes the already reviewed route in Montana and South Dakota.

Nebraska in April approved a law allowing TransCanada to re-engage with its Department of Environmental Quality (DEQ), allowing the company to continue to work collaboratively in determining an alternative route for Keystone XL avoiding the state’s Sandhills region (OGJ Online, Apr. 12, 2012). The company submitted alternative routing corridors and a preferred corridor to the DEQ Apr. 18, with the DEQ now helping determine a specific route and overseeing public comment and review. Once a route is finalized, TransCanada will submit it as part of the Presidential Permit application.

TransCanada said it will adopt and comply with 57 special conditions developed by the US Pipeline and Hazardous Materials Safety Administration including requiring a higher number of remotely controlled shut-off valves, increased pipeline inspections, and pipe buried deeper in the ground. DOS’s August 2011 final environmental impact statement for Keystone XL concluded that incorporating the 57 special conditions “would result in a project that would have a degree of safety over any other typically constructed domestic oil pipeline system under current code (OGJ Online, Aug. 26, 2011).”

Shipper interest in Keystone XL remains strong, TransCanada said, with the pipeline having firm, long-term contracts to transport more than 500,000 b/d of Western Canada Sedimentary basin crude to existing US Gulf Coast refineries. TransCanada’s Bakken Marketlink, using facilities which form part of Keystone XL, currently has firm, long-term contracts to transport 65,000 b/d of Bakken crude oil from the Williston basin in North Dakota and Montana. Keystone XL’s initial capacity will be 830,000 b/d.

TransCanada expects to begin construction of Keystone XL in first-quarter 2013, with completion slated for late 2014 or early 2015. Construction of its Gulf Coast Project (Cushing, Okla., to Nederland, Tex.) will begin this summer, with an in-service date of mid to late-2013, TransCanada said (OGJ Online, Feb. 27, 2012).

Opponents of the pipeline stated that the route proposed as part of the new application contains the same environmental risks as the permit rejected by President Obama in January and also maintained that project supporters have not “provided a new rationale” for building Keystone XL. Some also cited recent temperature records and “weird weather” in opposing the project on the grounds of what they describe as its increased carbon emissions.

The American Petroleum Institute meanwhile stated that there was “no reason for additional delays now that TransCanada has resubmitted a presidential permit application and Nebraska is evaluating the newly proposed route alternatives that completely avoid the Sandhills area,” noting that “the earth hasn’t moved, the geology hasn’t changed, the information remains the same” so no re-review of the application is necessary. API also cited what it described as growing bipartisan political and public support for the project in calling for its quick approval.

The American Fuel & Petrochemical Manufacturers described those opposed to Keystone XL’s construction as “anti-fossil fuels extremists” and called on President Obama to “act swiftly in the national interest to approve the Keystone XL pipeline.”

Contact Christopher E. Smith at chriss@ogjonline.com.

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