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TransCanada Re-Applies for Keystone XL Pipeline Permit

TransCanada Corp. (TRP) has re-applied for a U.S. permit for the Keystone XL oil pipeline, seeking permission to build a $5.3 billion portion of the original project from the Canadian border to Steele City, Nebraska.

The application uses already reviewed routes through Montana and South Dakota and will add an “alternative” path through Nebraska determined by the state’s Department of Environmental Quality, according to a statement from the Calgary-based company today.

“There is no win by denying this pipeline,” TransCanada Chief Executive Officer Russ Girling said today in a telephone interview. “There are several wins -- energy security, economic development, jobs, wealth creation and less of an environmental impact -- as a result of approving the pipeline.”

TransCanada’s prior application for the Keystone XL project, stretching from Alberta to the Gulf Coast, was rejected by President Barack Obama on Jan. 18 in part because of potential environmental risks in Nebraska.

“The company’s ‘new’ application is nothing but a rehash, riddled with the same environmental risks that raise the same unanswered questions while providing no new rationale for why it should be built,” Susan Casey-Lefkowitz, director of the Natural Resources Defense Council’s international program, said in an e-mailed statement.

NRDC and other environmental groups say the risk of an oil spill from Keystone XL poses a threat to Nebraska’s Sandhills area and the Ogallala aquifer, which provides drinking water to 1.5 million people.

Nebraska Route

Republicans, including presidential candidate Mitt Romney, have attacked Obama for blocking the pipeline, which they say will bring jobs and energy security to the U.S.

“I will build that pipeline if I have to myself,” Romney said last month.

Nebraska officials are studying a new TransCanada proposal that would route the project through the eastern part of the state. The Department of Environmental Quality will begin holding hearings next week before conducting an environmental impact study. The study may be concluded as soon as August, Girling said.

Construction Start

TransCanada said its new application relies on 10,000 pages of review that found the project would have minimal effect on the environment. The day after the old permit was rejected, the company said it may split the project, seeking federal permission for the leg that crossed the border and going ahead with construction of other portions of it.

“There is no legitimate reason for delaying this project any further,” Marty Durbin, executive vice president of the industry-funded American Petroleum Institute, said in a statement. “Keystone XL is a job creator and will bring more reliable Canadian oil to the market, which could help bring downward pressure on prices at the pump.”

The U.S. State Department has estimated it would provide jobs for as many as 6,000 construction workers. The pipeline needs approval from the department because it crosses an international border. The department plans to hire a third-party contractor to review the new proposal and will cooperate with Nebraska and other federal agencies, according to a statement released today.

Previously, the State Department estimated that the review may be completed by the first quarter of next year, according to the statement.

Permit Expected

As originally envisioned, the $7.6 billion project would’ve expanded TransCanada’s existing Keystone pipeline to carry as much as 830,000 barrels a day from Canada’s oil sands and North Dakota’s Bakken Shale along a 1,661-mile (2,672-kilometer) path to Gulf Coast refineries. The scaled-back proposal covers 1,179 miles of the northern portion of the project.

TransCanada expects to get its permit in the first quarter and finish construction by early 2015, the company said. It plans to begin construction as soon as next month on a $2.3 billion pipeline from Cushing, Oklahoma, to Texas refineries, the southern portion of the original Keystone XL proposal.

TransCanada was unchanged at C$42.95 at the close in Toronto.

“It is in the interest of our national security to be able to transport oil from Canada and North Dakota to refining centers by pipeline rather than by rail or truck, which have higher emissions,” Amy Myers Jaffe, director of the Baker Institute Energy Forum at Rice University in Texas, said in a phone interview today. “Standing our ground like Custer over pipeline infrastructure is irrational.”

To contact the reporters on this story: David Wethe in Houston at dwethe@bloomberg.net; 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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