Nebraska's Decision Is a New Complication for Keystone XL

Nebraska's Public Service Commission (PSC) handed TransCanada a pyrrhic victory by approving a new route for the Keystone XL tar sands pipeline through the state. In a split 3-2 decision, the PSC rejected the route TransCanada had proposed for Keystone XL, choosing instead an alternative route that has not been subject to any environmental review or public process by either state or federal authorities. Rather than expedite Keystone XL, the PSC decision only complicates the tortured path forward for the embattled tar sands pipeline. Meanwhile, the opposition to Keystone XL has only grown as the public has learned about the impacts that tar sands expansion has on the Indigenous Peoples in Alberta, on lands and waterways along the routes of pipelines, to refinery communities and to the climate.

Even TransCanada’s response to the Public Service Commission (PSC) decision shows the company is aware of the challenges that this decision poses for the project’s future:  

"As a result of today's decision, we will conduct a careful review of the Public Service Commission's ruling while assessing how the decision would impact the cost and schedule of the project."

Russ Girling, TransCanada's president and chief executive officer

It's important to note that every member of the PSC voted to reject TransCanada's proposed route for Keystone XL through Nebraska (see Figure 1). This is the route that was described in TransCanada’s application for Keystone XL and was reviewed by federal and state authorities. Instead, it approved a new route—the Keystone Mainline Alternative route - for the pipeline that has not been reviewed and differs materially from the route that was approved in TransCanada's Presidential Permit. Needless to say, this creates enormous legal uncertainty a project that already faces numerous additional hurdles.  

The PSC's decision comes just days after TransCanada's first tar sands pipeline—Keystone I—spilled 210,000 gallons in South Dakota, highlighting the real risks of spills from pipelines. That spill was not Keystone I's first major spill in South Dakota—the pipeline spilled 21,000 gallons in its first year and 17,000 gallons last year, in addition to dozens of smaller spills along the pipeline's route in its first year. These issues are unusual for a pipeline that is just seven years old and was predicted to spill just 1.5 times a decade. It also highlights the legitimate concerns that Indigenous Peoples and landowners have about the impact that the much larger Keystone XL pipeline will have on their lands and water sources. 

Moreover, the imperative of addressing climate change is driving a dramatic transformation of the global economy that has existential implications for the future of high carbon fossil fuels sources like Alberta’s tar sands. One of the clearest signs of this shift has come in the form of divestment by many of the largest multi-national oil producers who, despite significant investments in Alberta’s oil sands, have recently divested their assets in the region. The oil majors who have either sold their assets in Alberta or divested from major portions of their oil sands operations include Statoil, Marathon Oil, Shell, ConocoPhillips, Total, and ExxonMobil.

Against this backdrop, the decision in Nebraska today means that while the fight over Keystone XL may continue to move forward, the embattled tar sands pipeline proposal will not.