KEYSTONE XL:

All eyes on State Dept. as Neb. approaches finish line on review

With Nebraska just weeks away from completing its review of the revised Keystone XL pipeline proposal, questions are lingering over how quickly the federal government will complete its assessment of the controversial TransCanada project and what issues will be included in its analysis.

Environmentalists are pushing the Obama administration to consider the pipeline's impacts on U.S. emissions of greenhouse gases. State Department officials have indicated they are open to all new scientific data on the pipeline, including the project's climate change impacts.

The State Department is expected in the near future to complete a draft supplemental environmental impact statement (SEIS) for the Nebraska leg of the pipeline. Environmentalists recently predicted the environmental review might be released this week but now say it has been delayed.

"We think it will come out probably before Christmas," said Jane Kleeb of Bold Nebraska.

The 1,700-mile pipeline project, which has encountered a long series of delays since it was first proposed in 2009, would carry oil sands crude from Alberta south to the U.S. Gulf Coast.

Industry officials are hopeful that the State will issue its final decision on the pipeline during the first quarter of 2013, as Obama administration officials predicted late last year.

However, since that time the company has revised the proposed pipeline route, requiring additional studies at the state and federal level. Now federal regulators say the full review is not likely to be completed during next year's first quarter. No new end date has been set.

The company changed the project's pathway in April after state and local officials complained that the previous route would take the pipeline across Nebraska's Sandhills region, an ecologically sensitive area holding a major aquifer (ClimateWire, April 19).

In recent months, the Nebraska Department of Environmental Quality has been analyzing TransCanada's revisions to the pipeline's route, and last week held its final public hearing on the proposal. State regulators are likely to issue their recommendation on the pipeline project this month or early next month.

At that point, Nebraska Gov. Dave Heineman (R) will have 30 days to concur or reject the department's decision. Industry officials and anti-pipeline activists predict Heineman will sign off on the project.

Meanwhile, State is putting the finishing touches on its draft supplemental environmental assessment. Once that is released, federal regulators are required to solicit public comments on the report.

Administration officials have not said whether they will hold additional public meetings on the draft. But John Kerekes, central regional director for the American Petroleum Institute, suggested that such a gathering is likely.

"Although we don't think it's necessary, I would suspect there's a good chance they'll hold a hearing," Kerekes said. "There's a real effort for transparency and public outreach on this."

The final SEIS will be included in the department's broader determination of whether the pipeline is in the national interest. That assessment will also consider other national issues, including energy security and foreign policy considerations.

As laid out by the 2004 executive order authorizing State to review energy projects that cross U.S. boundaries, the final decision on the Keystone XL pipeline rests with the secretary of State. If another federal agency objects to State's decision, however, the project will be kicked up to President Obama.

Climate, beef and beer

As State Department officials draft the new environmental impact statement on the pipeline, scientists and anti-pipeline groups are urging the Obama administration to take another look at the project's potential impact on climate change (ClimateWire, July 18).

The department's August 2011 environmental impact statement on the original Keystone route project conceded that oil production from the Canadian oil sands would emit more greenhouse gases than production of other oils. But the analysis concluded that oil sands crude would be extracted regardless of whether the Keystone pipeline was built.

This time around, federal officials say they will examine any new data on climate change that weren't considered in the earlier environmental assessment.

Opponents of the Nebraska pipeline are also taking their case directly to the White House. A group of 18 state residents who are fighting the pipeline sent a letter to President Obama yesterday inviting him to a "Beef and Beer Summit" to discuss their concerns about the oil sands pipeline.

That invitation mirrors a November request for a meeting with Obama issued by a bipartisan group of senators. The 18 lawmakers, led by Sens. Max Baucus (D-Mont.) and John Hoeven (R-N.D.), want federal regulators to expedite the pipeline approval process.

Pipeline opponents Bold Nebraska, the Sierra Club and 350.org are also planning an anti-pipeline protest rally in Washington, D.C., on Presidents Day, Feb. 18.

The State opponents are fighting the pipeline in court. Three local residents, backed by the environmental groups, have filed a lawsuit in Lancaster County District Court in Nebraska challenging the constitutional basis of the Nebraska law that the Department of Environmental Quality used in analyzing the pipeline. That case is still pending.

Texas opponents of the Keystone XL pipeline have had better luck. A Texas landowner yesterday won a temporary injunction intended to halt TransCanada Corp.'s construction of a segment of its controversial oil sands pipeline on private property in Texas (Greenwire, Dec. 11).

The landowner charged that TransCanada defrauded local residents by claiming the pipeline would carry crude oil. Instead, the project will transport diluted bitumen, or dilbit, which would not meet the state's legal definition of crude.

TransCanada officials said they are evaluating the full effect of the order. But the company said the court action would not delay its overall plan to begin operating the southern leg of the pipeline before the end of next year.