KEYSTONE XL:

TransCanada threatens to change pipeline route to avoid permit delays

The company behind Keystone XL ultimately could tweak its pipeline proposal in order to sidestep the requirement for a presidential border-crossing permit, according to communications with landowners residing along its proposed route.

TransCanada Corp. did not disclose how it might further shake up the $5.4 billion pipeline, which remains in limbo as the State Department begins the next phase in a years-long review, in the proposed easement agreement obtained by Greenwire from a Nebraskan landowner requesting anonymity. But the company's desire to leave its options open is apparent in its letter.

The company proposes to pay landowners the second half of easement benefits -- offered in exchange for constructing the pipeline across private property -- within 45 days of a permit approval, or TransCanada will notify "the U.S. Department of State that it is modifying the proposed Keystone XL Pipeline project in such a way that a presidential permit is no longer required," as the letter puts it.

The Nebraska letter isn't TransCanada's first avowal that it plans to pursue alternative oil sands crude shipment options regardless of whether the White House approves KXL, but it is the first such warning since the release of a final State Department environmental review that projected the pipeline likely would not carry a major emissions footprint (E&ENews PM, Jan. 31).

TransCanada CEO Russ Girling told the Financial Post last year that he is planning for a possible rail link between the carbon-rich Alberta oil sands and a crude storage hub of Oklahoma, mirroring KXL's current path, as a plan B if the pipeline is mired permanently in the political struggle between greens and the industry.

Asked to respond to the Nebraska letter, TransCanada spokesman Shawn Howard said via email that the company has "no intention of modifying" the current KXL route. "Because we are offering to make significant payments to landowners, we are simply covering all potential future eventualities in these letters," he said.

The company remains locked in easement negotiations with landowners along the revised portion of KXL's new route through Nebraska, changed after its 2012 rejection in order to sidestep the most sensitive soils of the state's Sand Hills region. Before the route change, TransCanada had 94 percent of easements in the state signed, but its current progress level is said to be about 20 percent lower (E&E Daily, April 19, 2013).