TransCanada to alter Keystone route

TransCanada Corp., the company behind a $7 billion proposed pipeline that would carry oil sands crude from Alberta to Texas, agreed Monday to alter the route of the project.

Top officials at the company threw their support behind legislation to reroute the Keystone XL pipeline around the Sand Hills of Nebraska, an environmentally sensitive area that has become the epicenter of opposition to the pipeline in the state in recent months.

“I am pleased to tell you that the positive conversations we have had with Nebraska leaders have resulted in legislation that respects the concerns of Nebraskans and supports the development of the Keystone XL pipeline,” Alex Pourbaix, TransCanada’s president of energy and oil pipelines, said in a statement. “I can confirm the route will be changed and Nebraskans will play an important role in determining the final route.”

{mosads}The announcement comes several days after the State Department announced it would evaluate alternative routes to avoid the Nebraska Sand Hills, which includes a vital aquifer in the state. The decision to evaluate alternative routes will delay a final verdict on the project until after the 2012 election, a move that spares President Obama from having to weather the backlash of the politically thorny decision.

TransCanada said Monday the company will work with the State Department and Nebraska’s Department of Environmental Quality to determine a new pipeline route. A new environmental review will be required as well, which the State Department said last week could take until early 2013.

Monday’s announcement could lessen opposition to the Keystone XL project in Nebraska. The state legislature is in midst of a special session to consider legislation to reroute the project. Nebraska Gov. Dave Heineman (R), for example, has said he isn’t opposed to the pipeline in theory, but objects to the route.

Sen. Ben Nelson (D-Neb.), who has also said he opposes the pipeline route, hailed the agreement Monday.

“This is a win for Nebraskans,” he said in a statement. “The pipeline will be moved out of environmentally sensitive areas of Nebraska with TransCanada proposing a new route. The pipeline will be built, bringing jobs to Nebraska.”

The proposed Keystone XL pipeline would carry oil sands crude from Alberta to refineries in Texas.

While many in Nebraska praised the agreement to change the pipeline route, the move likely will not appease environmental groups. They have long called on President Obama to reject the project, raising concerns about the greenhouse gas emissions associated with oil sands production and the potential for oil spills.

Rep. Lee Terry (R-Neb.) said Monday night in the Capitol that the agreement resolves concerns for Nebraskans.

“It resolves the issue for those that were sincere about their feelings that it could harm the Sand Hills and potentially damage the aquifer,” Terry said. 

But he said it leaves environmental groups with less backing for their
opposition to the project.

“They are out there alone now,” Terry said.

The announcement came on the same day that Alberta Premier Alison Redford met with lawmakers and the State Department in Washington.

In the Capitol Monday night, Redford said the announcement makes her more optimistic that the project will ultimately be approved.

“I think it’s good news today,” she said. “It’s different circumstances than we had last week. It’s something I can be more optimistic about now than I would have been this morning.”

Redford met with State Department Assistant Secretary Kerri-Ann Jones, as well as House Speaker John Boehner (R-Ohio), Sen Joe Manchin (D-W.Va.) and Rep. Gene Green (D-Texas.).

Echoing comments by Prime Minister Stephen Harper this past weekend, Redford said earlier Monday that Canada will continue to explore opportunities to sell its oil to Asia.

“As we move through the process, we need to make decisions with respect to economic development as a result of circumstances that are not within our control,” Redford said Monday, echoing Harper’s comments. “At some point in time if we were to see an outcome that was disappointing, we may need to make other decisions.”

But Redford insisted that Canada’s plans to examine the possibility of selling its oil to Asia should not be perceived as a threat to the United States.

“The reality is that Canada and Alberta will build markets and we will go where there are markets that are available to us. I don’t think that we’re looking at an either/or and I never thought that we were,” she said.

Ben Geman contributed to this story.

This story was updated at 7:37 p.m.