The TransCanada oil pipeline rupture in a remote corner of South Dakota injects an unexpected element of suspense into the decision over the controversial Keystone XL pipeline due Monday at Nebraska’s Public Service Commission.
The independent five-member commission has been under pressure from the Nebraska state legislature and labor unions to approve the pipeline while environmental groups and prairie populists have vowed to appeal, if necessary, to the courts and follow that up with civil disobedience.
The commissioners’ decision remains one of the last hurdles for the roughly $8 billion Keystone XL pipeline, which has become central to the battle over climate change and energy infrastructure and was a campaign promise for President Trump.
First proposed in September 2008, the pipeline was designed to carry 830,000 barrels a day of mostly thick bitumen from the oil, or tar, sands region of Alberta to Texas Gulf Coast refineries well suited to process the crude.
President Obama in 2012 approved the southern segment from the storage hub in Cushing, Okla., to Port Arthur, Texas. But in late 2015 he rejected the northern segment, citing climate concerns over the energy-intensive extraction process for oil sands.
Trump reopened the case in his first week in office and on March 24 granted approvals.
Nebraska state politics have delayed the project again. Opponents of the pipeline are a mixture of climate activists, environmentalists concerned about the impact on the state’s ecologically delicate Sandhills region, and Nebraska farmers and ranchers who have fought TransCanada over the company’s planned exercise of eminent domain to plot the route of the pipeline.
“We still have a bunch of family farmers on the land their ancestors homesteaded,” said Jane Kleeb, a longtime foe of the pipeline who is now head of the Nebraska Democratic Party. “They have a deep emotional and cultural tie to the land and a responsibility that they must protect it.”
But the Public Service Commission has also come under pressure from the state legislature. Thirty-three of the state’s 49 senators — a two-thirds majority — signed a letter urging approval on March 8. The signatories ranged from state Sen. Jim Smith, a longtime Republican supporter of the project, to first-year state Sen. Mike McDonnell, a Democrat, former firefighter and executive board member of the state AFL-CIO who stressed job creation.
Earlier in the year, Smith introduced a bill that would eliminate the $75,000 annual salaries of the commission members and do away with restrictions on outside employment. Commissioners would be able to receive a $150 a day per diem. That would make it likely that the only people able to serve would be employees from a regulated business happy to pay someone to make regulatory decisions. So far, the bill has remained in committee.
TransCanada has also played a significant role in the state, supplying the arguments cited in the senators’ letter and also spending $925,224 on lobbying in the state from 2011 through 2015, the fourth-biggest sum in Nebraska over that period, according to Common Cause.
In Canada, there is a need for crude oil pipelines. Despite a slowdown after the 2015 collapse in oil prices and the departure of Royal Dutch Shell and ConocoPhillips, production from Canada’s oil sands, 3.85 million barrels a day in 2016, continues to grow — albeit at a slower rate. In October, TransCanada canceled plans for a 1.1-million-barrels-a-day pipeline that would have gone to Canada’s east coast. TransCanada has received adequate support for Keystone XL from companies shipping 500,000 barrels a day of crude oil, though with “various conditions attached,” the company’s president, Paul Miller, told shareholders on Nov. 9.
TransCanada has argued that the pipeline project would also create U.S. jobs, be safer than railroad alternatives, and bring new supplies of crude to U.S. and world markets. The company has stressed that new technology and burying the 36-inch diameter pipeline deeper in the ground would help make it “the safest pipeline ever built in North America.”
But the pipeline rupture on Thursday puts TransCanada on the defensive again. The company posted a photograph taken Friday on Twitter showing the approximate location of the leak, a dark circular spot in a vast flat landscape of farmland.
At midday Friday, TransCanada said on its website that there were more than 75 people “supporting our incident response, including specialists in environmental management, metallurgy, engineering, pipeline integrity and emergency response.” The company added that the leak was “controlled and there is no threat to public safety.”
The company also posted a video of Tribal Chairman David Flute from the Sisseton Wahpeton Oyate of the Lake Traverse Reservation. Standing at the site, Flute said that “it’s a significant spill” but that TransCanada said it would contain the spill, remove contaminated soil and inform the tribe of any artifacts that might be unearthed.
It remained unclear what had caused the rupture. TransCanada has a control room in Calgary that monitors pressure in the company’s sprawling network of pipelines. If it detects an unexplained pressure drop, it shuts off the segment of pipe where that occurs within 15 minutes. That still leaves time for 5,200 barrels to flow through the trouble spot.
Yet pipelines might be safer than railroads, which oil companies have been using to carry crude from Canada and North Dakota. This week in Canada, three railway workers are on trial for criminal negligence in the deaths of 47 people killed when an unattended train carrying crude oil rolled downhill and off the tracks and exploded in Lac-Mégantic.
Keystone XL foes still think they made winning arguments at public hearings in August. “All that baloney about thousands and thousands of new jobs evaporated when they admitted that the number of permanent jobs would be nine and the temporary construction employment was certainly under a thousand,” said David Domina, a lawyer representing landowners at the Public Service Commission.
TransCanada has also argued that Nebraska would get tax revenue from the pipeline, but Domina said the payments would end after the pipeline is fully depreciated, which would take only 15 years. But the pipeline would continue operating for 50 years. Domina also said he prompted the company to concede that it would abandon the pipeline in the ground after 50 years.
The public service commissioners were also looking at an alternative route for the pipeline, pressing TransCanada on why it didn’t plan a route for Keystone XL alongside the existing Keystone line. The existing line crosses east in Canada and would enter Nebraska further east, missing the Sandhills and touching a smaller part of the Ogallala aquifer that provides irrigation and drinking water in most of the state.
TransCanada, however, rejected that alternative, arguing that the proposed route was best.
Nebraska’s Public Service Commission was founded in 1885 to regulate railroads, then reformed with the passage of a constitutional amendment in 1906 as the Railway Commission. Today it regulates telecommunications, natural gas, oil pipelines, rail safety, grain warehouses, modular homes and recreational vehicles, high-voltage transmission lines and private water company rates.
But rarely does it occupy the spotlight as it will Monday.
“The people of Nebraska did not elect these commissioners to be partisan,” Domina said. “I’d be a psychotic mess if I didn’t think that decision-makers would be true to themselves and decide on the evidence.”