CALGARY — One of the last major hurdles for the Keystone XL crude oil pipeline was removed on Friday by the Nebraska Supreme Court which rejected an attempt by opponents to force the developer to reapply for state approval.
The court upheld the decision of regulators who voted in November 2017 to green-light a route through the state. The court’s decision was a victory for the US$8-billion project, which has been mired in lawsuits and regulatory hearings since it was proposed in 2008.
“The Supreme Court decision is another important step as we advance towards building this vital energy infrastructure project,” said Russ Girling, CEO of the Calgary-based proponent of the line, TC Energy Corp., in a statement.
“We thank the thousands of government leaders, landowners, labour unions and other community partners for their continued support through this extensive review process. It has been their unwavering support that has advanced this project to where it is today.”
The expansion of the Keystone pipeline system, along with Enbridge Inc.’s Line 3 replacement pipeline and the recently approved Trans Mountain pipeline expansion, are being counted on by Canadian producers to allow production gains and help relieve a glut of trapped oil in the West.
The Nebraska Public Service Commission voted 3-2 in favour of an “alternative route” for Keystone XL instead of TC Energy’s preferred pathway for the pipeline.
Lawyers for the opponents argued that TC Energy’s application with the commission was only valid for its preferred route, and the company formerly known as TransCanada could only seek approval for one route at a time.
Nebraska state attorneys disputed that claim, saying that the commission’s decision complied with the law and was in the public’s interest.
The high court on Friday sided with the state, saying the Public Service Commission is the agency responsible for determining which pipeline route is in the public interest, and that it did so after months of consideration.
“We find there is sufficient evidence to support the PSC’s determination that the (alternative route) is in the public interest,” Justice Jeffrey Funke wrote for the court.
If completed, the 1,897-kilometre pipeline would carry as much as 830,000 barrels of crude per day from Hardisty, Alta., through Montana, South Dakota and Nebraska, where it would connect to an existing pump station in Steele City, Neb.
From there it would continue through Kansas, Oklahoma and Texas until it reaches Gulf Coast refineries.
“This court victory is another step forward for this vital pipeline project after far too many years of regulatory delays and hurdles,” said Alberta Premier Jason Kenney in a statement on Friday.
Last week, the province announced it would extend production caps on oil companies by a year, due in large part because the Line 3 replacement project is being delayed by a year by permitting issues and legal wrangling in Minnesota.
The curtailment program introduced by the previous NDP government is designed to draw down oil storage levels in Alberta to support local prices. It was originally intended to gradually be phased out and cancelled by the end of 2019.
President Barack Obama’s administration studied the Keystone XL project for years before finally rejecting it in 2015 because of concerns about carbon pollution.
President Donald Trump reversed that decision in March 2017. Federal approval was required because the route crosses an international border.
— With files from The Associated Press
Companies mentioned in this story: (TSX:TRP, TSX:ENB)
Dan Healing, The Canadian Press