As TransCanada Pipeline officials continue to clean up a leak in the Keystone Pipeline near Amherst, South Dakota, the Nebraska Public Service Commission voted 3-to-2 on Monday to approve the controversial extension of the pipeline through seven counties in that state.
The approval of the Keystone XL Pipeline constitutes the final major regulatory hurdle to constructing the controversial pipeline, which would carry about 800,000 barrels of oil per day from the oil sands region of Canada to refineries along the Gulf of Mexico, where it would then be exported to the global market.
The Public Service Commission was not allowed to take the new spill, or even pipeline safety in general, into account in making its decision.
The Commission did not grant approval for TransCanada’s preferred route, however, instead giving the green light to an alternative path to the east. The alternative route means landowners who had thought they were not in the path of the project will now be affected, and must negotiate right-of-way agreements with TransCanada. It could also lead to new lawsuits that will further slow the project.
Though the decision paves the way for the pipeline to be built, it does not guarantee that it will be completed.
In addition to other lawsuits, TransCanada still needs to determine that the pipeline makes economic sense, since drilling tar sands oil in Alberta and transporting it to the Gulf of Mexico is far more costly than energy projects in other countries, such as the Middle East. If the company determines it has enough buyers for the oil, it will go forward.
When the project was first proposed nine years ago, the price of oil was far higher than it is today, making the project more lucrative.
Interestingly, TransCanada’s statement responding to Nebraska’s decision was somewhat muted.
“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,” said Russ Girling, TransCanada’s president and CEO.
Environmentalists have fiercely opposed the project on multiple grounds, including concerns about oil spills and worsening climate change. In 2015, the Obama administration rejected the pipeline in part because it would enable the burning of more carbon-intensive oil that would worsen global warming.
The Trump administration quickly approved the pipeline upon taking office, but Nebraska still loomed as a potential roadblock to the project.
While pro-pipeline interests celebrated the decision, environmentalists were quick to denounce it.
“The Keystone XL pipeline is and has always been a disaster — from a climate perspective, from a risk perspective, and from an investment perspective,” said David Turnbull, strategic communications director for Oil Change International, an environmental advocacy group.
“The tar sands are a losing bet, as evidenced by fleeing investment and stagnant development. Any new pipelines out of the tar sands would be entirely out of step with the goals of a safe climate future enshrined in the Paris Agreement. At the end of the day, we remain confident that this pipeline will never be built,” Turnbull said in a statement.
Bill McKibben, co-founder of 350.org and a prominent environmental activist, said in a statement, “No one should give up. For seven years now public pressure has kept 800,000 barrels a day of tar sands oil underground, and in the process helped spawn a worldwide fight against fossil fuel infrastructure. We will work with our colleagues in the upper Midwest on the next steps to defend their land and our climate.”
A study in the journal Nature in 2015 found that if the goals of the Paris Climate Agreement are to be met — meaning that global warming is limited to well below 2 degrees Celsius (or 3.6 degrees Fahrenheit) above preindustrial levels by 2100 — then much of Canada’s tar sands oil needs to stay in the ground.
In fact, the study found that 75 percent of Canadian oil is un-burnable in a 2-degree scenario.
Canada’s government, however, is intent on exploiting those resources.
“No country would find 173 billion barrels of oil in the ground and just leave them there,” said Canadian Prime Minister Justin Trudeau, at an energy conference in Houston in March.