Thursday, February 26, 2015

The President Vetoes Keystone XL Pipeline Bill

On Tuesday President Obama vetoed a bill from congress that would have authorized construction of the final segment of the Keystone XL pipeline and taken the authority from the U.S. Department of State. However, with the President’s veto the Keystone XL pipeline appears to remain permanently in limbo with the state department.

There is currently a pipeline Keystone I that runs east from Hardesty Saskatchewan to Manitoba and then south through the Dakotas to Steel City, Nebraska. It is a less direct route and is a lower volume pipeline than the proposed Keystone XL.The Keystone XL would replace Keystone I with a  a new and better pipeline. Keystone I is old and this would be an upgrade to the oil transport infrastructure. Keystone II runs from Steel City to Cushing, Oklahoma at the Oklahoma storage facilities. Keystone III running from the Cushing Oklahoma to the Nederland, Texas began delivering crude oil from Cushing, OK, to the oil refineries in Texas on Wednesday, January 22, 2014. The Gulf Coast Project, Keystone III, did not require a Presidential Permit because it does not cross an international border..

On January 31, 2014, the U.S. Department of State released the Final Supplemental Environmental Impact Statement for the Keystone XL Pipeline. The executive summary states that Keystone XL is “unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States based on expected oil prices, oil-sands supply costs, transport costs and supply-demand scenarios.” In other words, no matter what action the Administration does the oil sands are not staying in the ground in Canada. There is world demand for heavy crude oil and it will be met. The Texas refineries are optimized for heavy crude either from South America or Canada. The crude oil will come by pipeline, boat, truck or rail road. As Marcia McNutt, the editor in chief of the AAAS journal Science stated in a recent editorial moving the Canadian crude by pipeline is the least environmentally damaging and safest method of transporting oil.

The Department of State opened a second 30 day comment period on February 5, 2014 then in April the administration announced that they would be delaying the decision until after the Nebraska Supreme Court decided the case which happened last month. Citing uncertainty from a February court decision that struck down a Nebraska state law (LB1161) allowing the Governor to approve the route in Nebraska the Department of State comment period was kept open. However, on Friday, January 9, 2015 the Nebraska State Supreme Court ruled that the measure passed in 2012 “must stand by default.” The law under question was Nebraska law LB 1161 that Governor Heineman used to sign the January 2013 recommendation to the U.S. Department of State for a Presidential Permit for the Keystone XL pipeline to cross the international boarder.

Back on May 4th 2012 TransCanada Corporation made a new application for a Presidential Permit to construct and operate the Keystone XL Pipeline after the Department of State rejected their original 2008 application in January 2012. At the time, the Department of State was under a deadline imposed by Congress and rejected the application because of inadequate time to determine the environmental impact of the proposed pipeline.

TransCanada Corporation turned around and on May 4th 2012 announced a new application for a Presidential Permit to build the northern most section of the Keystone XL pipeline (Phase IV) from the Canadian Border from where Saskatchewan meets Montana using a route that would cross South Dakota and a new route to cross Nebraska and meet up with the Keystone Phase II which runs from Steel City, Nebraska to Cushing, Oklahoma. On January 22, 2013 Governor Heineman of Nebraska signed the recommendation to the U.S. Department of State for a Presidential Permit for the Keystone XL pipeline to cross the international border after the Nebraska state regulators recommended approval of the revised route selected (with their guidance) for the Keystone XL Pipeline.

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