Keystone XL starts operating again

Keystone XL starts operating again

Giancarlo Strocchia
The pipeline, which carries crude oil from Canada to the United States, had been shut down after an oil spill in South Dakota. Meanwhile, the state of South Dakota has granted initial approval to the project to expand the pipeline

Keystone begins operating again. The opening is on schedule with TransCanada’s earlier announcement that the pipeline, which carries oil from the oilfields in Alberta, Canada, to refineries located in the Gulf of Mexico, running through the state of Nebraska, would resume its activities on November 28. The pipeline had been shut down following an oil spill of 5,000 barrels (almost 800,000 liters) from its conduit in South Dakota. Meanwhile, in recent days, the project to expand the pipeline has made an initial step forward. The Public Service Commission of the state of Nebraska appointed to assess the plan to expand the pipeline has approved the project, even though the chosen route is not the one proposed by TransCanada. The pipeline, with a diameter of roughly 36 inches, is expected to be extended by approximately 1,200 miles.

Still everything to play for

The Commission’s decision removes some of the obstacles previously placed in the way of the project’s implementation by the Clinton and the Obama administrations in turn. The advent of Donald Trump to the White House, and the revival of oil production and processing activities, has brought renewed prospects for taking up again some of the projects that had come to a standstill, including the one to expand the Keystone pipeline. In 2015, TransCanada withdrew the application it had submitted to the Nebraska Public Service Commission after the State Department blocked the pipeline. The company then submitted a new application to the Commission in 2017, after President Trump issued an executive memo to advance the project.

Environmentalists and crude oil prices: unknown elements

The issue of expanding Keystone XL, which goes back to 2008, could now be on the verge of a solution. However, the Nebraska Public Service Commission’s decision, reached with a 3 to 2 vote, does not put the final word on the future of the project since it could still be the subject of a likely legal battle. A number of environmentalist organizations who have consistently opposed the project’s implementation could appeal the Commission’s decision in the district court. But this is not the only factor that might stop the pipeline extension from going ahead. For TransCanada it still remains to be seen whether the project remains commercially viable, given the economic challenges posed by an extended period of low oil prices.

A company with major energy interests

TransCanada is one of the leading developers of North American energy infrastructure and manages one of the largest networks of natural gas pipelines, stretching for over 91,500 kilometers and tapping into virtually all the main natural gas supply basins in North America. TransCanada currently owns or has interests in over 6,200 megawatts of power generation in both Canada and the United States, and is also the developer and operator of one of North America's leading liquids pipeline systems that extends over 4,800 kilometers, connecting growing continental oil supplies to key markets and refineries.