New Route One of Many Obstacles Remaining for Keystone XL

On Monday, the Nebraska Public Services Commission (PSC) issued its long-awaited decision regarding a route permit for the zombie Keystone XL tar sands pipeline. Voting 3-2, the PSC decided to issue a route permit, but not for the route that TransCanada, the company behind the fraught pipeline, had applied for or argued for strenuously. Early headlines trumpeted “Approval!” but as the dust settled by the end of the day, the narrative had already shifted toward reality: the PSC decision could actually make it harder for Keystone XL to ever be built.

Approval of an alternative route through Nebraska throws up all kinds of new obstacles for Keystone XL. Aside from new legal hurdles, the biggest obstacle may be feasibility. In lengthy testimony before the PSC, TransCanada argued that the “Mainline Alternative” route—the one the PSC approved—was not feasible as an option. That raises interesting procedural questions (is an alternative route that’s not viable really an alternative?), but the bigger question is whether this alternative route approval creates more of a roadblock than just a hurdle.

TransCanada’s response to the PSC decision wasn’t the jubilant declaration of a victor taking a victory lap. Indeed, it mirrored their response, a few months ago, to Canada’s energy regulator announcing that it would review the climate impacts of TransCanada’s now defunct proposal for the Energy East tar sands pipeline. After requesting a suspension for that regulatory process “to allow time to conduct a careful review of recent changes announced by the NEB,” TransCanada announced that it would be canceling the project. Yesterday, TransCanada said almost the same thing, explaining that it would “conduct a careful review of the Public Service Commission's ruling” before deciding how to proceed.

Piling onto the uncertainties are a long list of procedural hoops. First, the PSC decision is appealable, and it is likely to be appealed, throwing the outcome into what may be a multi-year legal battle in Nebraska courts. A new route means TransCanada needs to attempt working with a whole different batch of landowners who may or may not be willing to grant easements across their land for a risky tar sands pipeline that would carry hundreds of thousands of barrels of toxic tar sands through their fields daily. Following the PSC’s announcement, the U.S. State Department also said it was reviewing the decision because the cross-border permit issued earlier this year applies to a project that is the same “in all material respects” as the project for which the permit was granted. And then there are the additional federal permits that TransCanada has yet to secure, which include Clean Water Act permits issued by the Army Corps of Engineers. And a federal case, brought in part by NRDC, challenging the legal adequacy of environmental review done for the cross-border permit issued by the Trump administration in March 2017, also looms over the pipeline’s fate.

And, and, and. It’s true there’s more. As the PSC was announcing its decision, new energy was being injected into the long-running fight led by activists opposed to Keystone XL and other proposed fossil fuel infrastructure. As of this writing, more than 30 organizations and 10,000 individuals had already signed the “Promise to Protect,” a commitment to peaceful resistance of the pipeline and its construction should it ever proceed.

All of this underscores the far more basic fact that Keystone XL is a bad idea whose time has long since passed. Since the project was first proposed in 2009, concentrations of carbon dioxide in the atmosphere have steadily climbed and nearly every year and every month has set new records for “hottest ever.” But Keystone XL’s proposal is premised on the idea that global crude oil demand is insatiable and will rise well into the future. In other words, its business case demands that we wave goodbye to any hope for a climate-safe world. That business case hasn’t fared well in other important ways: oil markets continue to remain soft compared to the world in which Keystone XL was first proposed; shipper interest in the pipeline, while supposedly sufficient, was hard for TransCanada to attract; and even if Keystone XL does eventually receive all necessary permits, its in-service date could be so delayed that space will almost certainly not be needed by tar sands producers.

But that’s just the start. As we saw just last week, the more tangible threats posed by a project like Keystone XL are constant. TransCanada’s own Keystone pipeline—a slightly smaller tar sands pipeline built in 2010—sprung a large leak in South Dakota, spilling an estimated 210,000 barrels into a farmer’s field. Alarmingly, it was the third large spill from that pipeline in South Dakota alone and came after numerous reports of problems like corrosion and other leaks all taking place in the few years this so-called “state of the art” pipeline has been operating. And that should concern all of us. If a tar sands pipeline happens to spring in a leak near open water, we’ll be reliving 2010’s catastrophic Kalamazoo River spill. There, more than 800,000 gallons of tar sands spilled into a tributary of the Kalamazoo, leading to a multi-year cleanup that cost well over $1 billion and has left the river bottom polluted with tar sands residues that simply cannot be safely removed.

Keystone XL is the poster child of an era we can no longer afford to return to: sky-high oil prices and devil-may-care expansion of risky, high-carbon resources. Its continued delay may one day spell its final doom, but in an ideal world, TransCanada will see the writing on the wall and cancel the project. The company has committed to making an investment decision that will be critical to the pipeline’s fate in early December.

About the Authors

Josh Axelrod

Manager of fossil fuels and climate policy, Canada Project, International Program

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