Bloomberg News

Keystone Foes Vow to Fight South Dakota Permit Renewal

May 09, 2014

The latest Keystone delay has created a new opening for foes of the pipeline, this time in South Dakota.

The U.S. State Department on April 18 extended consideration of TransCanada Corp. (TRP:US)’s project to allow time for a court challenge to the route in Nebraska, something that will push a decision from President Barack Obama until after Keystone's South Dakota construction permit expires at the end of June.

Critics of the pipeline -- which has become the focus of nationwide environmental protests since South Dakota issued its permit in 2010 -- said they planned to use the renewal process to press for more safeguards during construction and against an oil spill.

“We were new to this four years ago,” said Paul Seamans, chairman of the Dakota Rural Action, a farm group. “The original goal was to just get the safest pipeline we could get.”

Now he said the goal is “to stop it,” though he said such a result was unlikely.

New conditions on construction could add to the cost of the $5.4 billion project, though TransCanada Chief Executive Officer Russ Girling told reporters last week that he expects the South Dakota Public Utility Commission to renew the permit after it expires.

Public Comment

Gary Hanson, the chairman of the three-person state utility commission, said in an interview that regulators wouldn’t require a new analysis of the project unless a route change in Nebraska forced the same in South Dakota.

Commissioners will solicit public comment and may hold additional public hearings to consider any concerns that may have developed since 2010, Hanson said in a phone interview.

State regulators attached about 50 conditions to the construction permit to minimize the risks of building the line. For example, the Calgary-based pipeline builder has to take special care to prevent erosion as it repairs particularly sandy terrain after construction.

It also has to do field surveys in a fossil-rich northwest part of the state.

Seamans said his group would press for greater protections for cultural resources, including near Indian lands, and more liability protections for property owners.

“The longer this goes, the more opposition builds to the pipeline,” Seamans said. He said opponents were still discussing strategy.

Seamans said Keystone would cross his ranch in the central part of the state. He signed a contract with TransCanada (TRP) but only because the company has eminent domain powers.

Regulatory Process

“TransCanada has followed every state and federal process that we have been required to for Keystone XL and we will continue to do so,” spokesman Shawn Howard said in an e-mail. “We have tremendous respect for the regulatory process we have been engaged in for more than 2,000 days.”

Keystone XL, designed to bring Canadian heavy crude to U.S. refineries, would cross three states: Montana, South Dakota and Nebraska. TransCanada submitted its original application for the project in 2008.

It would connect to an existing network of pipelines, providing another link between Alberta’s oil sands and U.S. Gulf Coast refineries.

“There are technical issues with numerous permits along this pipeline system that have expiry dates and we need to work through those,” Girling told reporters after the company’s annual meeting in Calgary May 2. “The underpinning of the various permits hasn’t changed and to the extent that they need to be renewed, at the current time we’re not expecting any major issues in renewing any permits we need to renew.”

To contact the reporters on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net; Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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Companies Mentioned

  • TRP
    (TransCanada Corp)
    • $53.86 USD
    • -0.02
    • -0.04%
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