Photographer: Andrew Burton/Getty Images

Keystone, Dakota Access Lines Face Hurdles Despite Trump Support

  • TransCanada applies for presidential permit for Keystone XL
  • The oil pipelines still face uncertain timing and permitting

President Donald Trump may have revived prospects for the controversial Keystone XL and Dakota Access oil pipelines, but the path to their completion still contains hurdles.

While Trump moved to reverse former President Barack Obama’s measures that stalled the projects, the companies still have court battles ahead and, for Keystone, an application process that invited litigation and fierce opposition the first time around.

TransCanada Corp. applied for a presidential permit for its Keystone XL project on Thursday. Trump, in his support for both pipelines, also advocated for a swift review of Dakota Access. Energy Transfer Partners LP, the developer for the Dakota line, has declined to comment publicly since Trump’s executive actions.

For the $3.8 billion Dakota Access line, the end may be near, though the timing remains unclear. The case in court, between Energy Transfer and the U.S. Army Corps of Engineers, will continue. It’s likely a hearing could come in the first half of February and a decision in early March, said Brandon Barnes, an analyst at Bloomberg Intelligence.

The presidential memo indicates that the new Secretary of the Army, once appointed, will likely fully reverse the Environmental Impact Statement process the Obama administration began. If that occurs before the court reaches a ruling, the Standing Rock Sioux Tribe will likely seek an injunction -- which is unlikely to be granted, Barnes said. With nothing stopping Energy Transfer from resuming construction, the project will be completed while the parties continue litigating the case.

Vicki Granado, a spokeswoman for Energy Transfer, declined to comment.

Nebraska Review

Keystone, however, faces a longer process. The company will reapply for the project, and Trump’s memo says the Secretary of State -- who has authority over presidential permits for cross-border pipelines -- should reach a permitting decision within 60 days.

The $8 billion line that would take crude from Canada’s oil sands to Gulf of Mexico refineries encountered hurdles along the way before being denied by Obama, particularly in Nebraska. Landowners in the pipeline’s path sued TransCanada, challenging the underlying laws leading to the selection of the route. Eventually, the company surrendered to a review by Nebraska’s Public Service Commission instead of waging further court battles -- shortly before Obama’s rejection.

TransCanada will encounter landowner resistance this time too, said Jane Kleeb, president of Bold Alliance, which was previously Bold Nebraska. Kleeb, who was a prominent opponent of Keystone, said the group is ready to fight it again.

Prepared for Trump

"We were prepared for Donald Trump to make this move," she said. "It doesn’t catch us off guard."

Trump’s actions only affect the presidential permit, said Jim Rubin, a partner at law firm Dorsey & Whitney LLP in Washington. Crossing public and private land and waterways all require permitting and may be subject to judicial review, he said.

"You can be sure that the folks that don’t like the pipeline are going to challenge it through local means," Rubin said.

TransCanada spokesman Terry Cunha said the company will need to submit a new application to Nebraska’s PSC. And going through this normal approval process -- while it’s slightly longer and open to public comment -- will likely be easier for the company, said Bloomberg Intelligence’s Barnes.

"What tripped them up is they were trying a little bit of a shortcut," he said. But nonetheless, "they have plenty of process left in front of them."

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