TransCanada’s Keystone XL pipeline. Back on track?

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Despite much noise during the political season leading up to the US presidential election that President Obama and Democrats were blocking TransCanada’s proposed Keystone XL Pipeline, to a large degree the fate of the project has been in the hands of Nebraska Gov. Dave Heineman.

The Republican governor had been a strong opponent of the original planned route of the pipeline (which would transport bitumen from Alberta’s oil sands to US Midcontinent and Gulf Coast refineries), citing the risk to the Ogallala Aquifer in Nebraska’s Sand Hills region.

On January 22, 2013, he notified President Barack Obama and Secretary of State Hillary Clinton that he has approved the proposed Keystone XL crude oil pipeline’s new route across the state that avoids Nebraska’s Sand Hills region.

Heineman asked that a final evaluation report by the state’s Department of Environmental Quality be included in the State Department’s supplemental environmental impact statement on the proposed pipeline.

Will the pipeline be approved?

Motiva Enterprises has bet on it. Last summer it completed a new crude distillation unit and associated units, boosting the Port Arthur, Texas, refinery’s capacity from 285,000 to 600,000 barrels of oil per day and making it the largest US refinery. The expansion allows Motiva to process lower-cost heavy oil from Latin America (and from the oil sands of Canada via TransCanada’s proposed Keystone XL pipeline).

However, environmentalists are still strongly opposed to the pipeline and the prospect of the dirtiest of oils (tar sands) being shipped across the country and across aquifers, fearing spills and other contamination.

Shortly after Heineman’s announcement the State Department reported that it would not complete its review of the proposed pipeline project until the end of March.

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Photo by mothernature photography used under a Creative Commons license.
Stuart Hampton

British editorial veteran Stuart Hampton has been covering oil and gas companies for Hoover's since the Neogene-Quaternary period. Well, actually, since the early 1990s. For the best overview of the oil industry and its history he recommends Daniel Yergin's "The Prize." You can also follow Stuart on Twitter.

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