S. Dakota suddenly a problem for KXL
TransCanada Corp. was expecting South Dakota’s recertification of the Keystone XL pipeline would be a routine procedure to determine that the project was still relevant. After all, the permit for construction of the 500-kilometre portion of the Alberta-to-Nebraska project traversing South Dakota had sailed through the South Dakota regulator’s desk five years before without much opposition.
Instead the process has dragged on for more than eight months, as environmental, Native American and citizen groups vehemently opposed to the pipeline attempt to forestall the process.
On Thursday, the South Dakota Public Utilities Commission finally set a date — July 27 — for a hearing for the re-certification process, which will see as many as 40 interveners, most of them environmental groups.
“Normally, we issue a siting permit and construction begins,” Chris Nelson, chairman of the commission, said Wednesday, the day before the hearing. “So coming back four years later [when the permit expired] is not really something we have dealt with before.”
The commission had initially authorized the Albertato-Nebraska crude oil conduit in June 2010, but state rules dictate that permits must be re-authorized if construction has not begun within four years of their issuance.
The $10 billion project has been under review by the State Department for the past six years and despite five largely favourable environmental assessment reports have yet to secure the presidential permit from Barack Obama who has the final say as the project crosses an international border.
The unprecedented legal wrangles are now routine for TransCanada.
“Whether or not we are surprised that this hearing has taken a life of its own — the answer is no,” TransCanada spokesman Mark Cooper said.
“We learned long ago that opponents of modern infrastructure projects will use whatever delay tactic they can to slow our project.”
The big question is whether the U.S. State Department, which is currently reviewing the 830,000-barrel per day project and could conceivably make a recommendation to U.S. President Barack Obama for a final decision any day now, may hold back its verdict until South Dakota’s legal wrinkles are ironed out. Department officials did not respond to a request for comment.
“This is not a reapplication for a permit,” Cooper insists.
“This is satisfying that the conditions on which the permit was approved was still applicable. These state pro- cesses are independent of presidential permit processes.”
But last year, the State Department halted its work to accommodate a legal challenge to the 1,900-kilometre pipeline in the Nebraska Supreme Court. The company hopes to complete the project two years after the presidential permit.
The new hearing date comes more than two months after it was originally proposed and certainly months after TransCanada’s submission last September. The company had initially hoped to wrap up the process by the third quarter, but with hearing starting only in late July, the process may be pushed further into 2015.
“Any decision made by the commission is appealable,” said Robin Martinez, Martinez Madrigal & Machicao LLC, who represents Dakota Rural Action, a citizen’s group against the pipeline.
“I would imagine if the intervening parties who are opposed to the pipeline lose, they will go to the courts; if TransCanada loses it will go to the courts. It will be awhile — if it goes to the court it could easily go to 2016.”
South Dakota’s Nelson insists that his commission’s central question “has not changed from day one — the question still is: ‘does Keystone XL able to meet the conditions upon which the original permit was issued?’ ”
But TransCanada is worried that the arrival of non-state supporters has expanded the scope of the process.
“Since the process has begun, we have started to see out-of-state interests that are interested in speaking. We have Bold Nebraska, and interveners from other states,” Cooper said.
“Former NASA scientist James Hansen is also looking at providing testimony, we understand.”
Hansen, of course, is a legend among green groups for his scientific credentials and for famously stating that it was “game over for the climate” if Canada continues to develop the oilsands.
Meanwhile Obama said he may withhold a decision on the pipeline between midJune and mid-October as it does not wish to interfere in Canada’s federal election, three Ottawa-based sources familiar with the matter told Reuters.
TransCanada is set to report its first quarter earnings on Friday.