TransCanada to Change Keystone XL Route Through Nebraska

TransCanada Corp. (TRP) will move its $7 billion Keystone XL pipeline away from the state’s ecologically sensitive Sandhills region.

“The route will be changed, and Nebraskans will play an important role in determining the final route,” Alex Pourbaix, president for energy and oil pipelines, said in a statement today.

Chief Executive Officer Russ Girling has said changing the pipeline’s route would “seriously jeopardize” the project.

“They’re willing to go through a process that sites it out of the Nebraska Sandhills,” Senator Mike Flood said during legislative debate today. “This is a voluntary decision on their part and it is a major development on this issue,” said the Speaker of the Legislature.

The State Department, which had expected to decide on the project by the end of this year, announced Nov. 10 it was delaying its decision by at least a year to consider new routes. It has jurisdiction over the project because the pipeline crosses an international border.

The original route was opposed by Nebraska politicians, landowners and environmentalists because they feared a leak on the pipeline would foul the Ogallala aquifer, which provides drinking water to 1.5 million people.

Environmental Impact Study

Nebraska’s Department of Environmental Quality will take a lead role in the new environmental impact study and pay for it, according to legislation Flood introduced today. The State Department conducted the initial study and was criticized by some lawmakers who said in an Oct. 26 letter that the environmental-review process was marred by potential bias in favor of TransCanada.

The Nebraska legislature began a special session Nov. 1 to try to pass laws that would change the pipeline’s route away from the aquifer. Governor Dave Heineman, a Republican, has said he would support the pipeline if it didn’t traverse the Sandhills.

The state will fund the study to avoid any conflict of interest, Flood said. Once a completed supplemental environmental study is submitted, the Nebraska governor will have 30 days to tell federal regulators if he approves any newly proposed route, according to the bill.

The proposed law is being weighed in committee and is expected to be considered by the full Nebraska legislature tomorrow.

TransCanada shares fell less than 1 percent to close at C$40.51 in Toronto.

TransCanada’s 1,661-mile (2,673-kilometer) Keystone XL would run from Canada’s oil sands across six states to refineries in the Gulf of Mexico.

To contact the reporter on this story: Bradley Olson in Houston at bradleyolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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