TransCanada ready to apply for a new permit for Keystone oil pipeline

The Canadian firm behind the controversial Keystone XL pipeline will reapply as early as today for a federal permit to ship carbon-intense crude oil from Alberta to the United States, according to people familiar with the company's plans.

The Canadian firm behind the controversial Keystone XL pipeline will reapply as early as today for a federal permit to ship carbon-intense crude oil from Alberta to the United States, according to people familiar with the company's plans.

In January, the Obama administration denied a permit for TransCanada, the firm hoping to build the project, on the grounds that a congressionally mandated deadline of Feb. 21 did not give officials enough time to evaluate the pipeline's impact. Since then TransCanada has said it would proceed with plans to construct the segment running from Cushing, Okla., to Port Arthur, Texas, and unveiled a new route for the pipeline in Nebraska.

President Barack Obama, environmentalists and many Nebraskans -- including the state's Republican governor Dave Heineman -- had raised concerns that the project's original Nebraska route could imperil the ecologically sensitive Sandhills region, as well as the Ogallala aquifer, a major source of drinking water for the state's residents.

The move will revive one of the year's most contentious political issues -- which has divided the Democratic base between environmentalists and some unions, and has unified Republicans in support of what they view as a critical source of energy supply for the U.S. -- just months before the November elections.

The new route TransCanada proposed in mid-April would steer clear of northwestern Nebraska's Sandhills region, though it still runs over parts of the Ogallala aquifer.


The state's environmentalists argue that Nebraska officials have defined the Sandhills region too narrowly and say that the revised route will traverse the Sandhills in Nebraska's northern Holt County.

The State Department has jurisdiction over granting the pipeline permit because the project crosses an international border. The original pipeline was slated to run 1,700 miles from Hardisty, Alberta -- an area known as "tar sands" or "oil sands" -- to Port Arthur. In Canada, operators extract a viscous oil called "bitumen" from formations of sand, clay and water, in a process that consumes more energy and water than conventional drilling methods. Scientists such as James E. Hansen have predicted oil sands activity could accelerate global warming to dangerous levels.

One individual familiar with TransCanada's plans -- who asked not to be identified because the announcement has not yet been made -- said the company will inform State Department officials that the pipeline segment running between Cushing and Port Arthur is not part of its application because it does not require federal approval. Instead, the application will include the new Nebraska route and rely largely on the amended plan that was considered as part of the Federal Environmental Impact Statement the State Department issued on Aug. 26, 2011.

When asked about the matter Thursday, TransCanada spokesman Terry Cunha replied in an email, "We are working on refiling our application for a presidential permit for Keystone XL and hope to do that soon." The State Department declined to comment on the subject.

House Speaker John Boehner, R-Ohio, said in a statement that the move means President Obama has no excuse to block the pipeline's construction any longer.

"With Nebraska now on board and the application being re-filed, the president has lost his always-flimsy excuse for blocking this jobcreating project," the statement said.

"With energy security at stake and jobs on the line, and he should listen to the American people, not just his political base, and approve it immediately."

Jane Kleeb, executive director of the group BOLD Nebraska, said the tweaks TransCanada made to the pipeline's route do not justify its federal approval.


"The fundamental facts remain; Americans are being asked to put clean water at risk for an extreme form of energy that will add nothing to our energy security," Kleeb wrote in an e-mail. "We are subsidizing this extreme form of energy to boot with over 1 billion of our taxpayer dollars used to retrofit a Saudi-owned refinery for their tar sands headed straight to the export market.

A transparent process will show TransCanada's risky pipeline is not in our national interest."

The lower segment of the pipeline, which is backed by both Obama and congressional Republicans, would cost $2.3 billion to build, transport 700,000 barrels per day starting in mid- to late-2013 and alleviate the glut of oil at Cushing, a major energy terminal.

TransCanada is already moving ahead with obtaining the permits it needs to build the Oklahoma-Texas leg of the pipeline, having recently submitted applications to Army Corps of Engineers district offices in Tulsa, Okla. and Galveston and Ft. Worth, Texas for the project.

Kim Huynh, a federal dirty fuels campaigner with the advocacy group Friends of the Earth, said the firm was seeking to circumvent a thorough review by applying for a "Nationwide Permit 12."

That move triggers a 45-day deadline by which the agency must approve or deny the permits; if the Corps does not respond within 45 days, the permits are automatically approved and construction can proceed.

Jane Watson, the associate director in the ecosystems protection division for the Environmental Protection Agency's Region VI office, wrote a Nov. 8 letter to the Corps' Galveston district office saying the southern segment of the Keystone XL pipeline is ineligible for such an expedited permit and warrants a more detailed environmental review.

"[O]f the 101 crossings that require preconstruction notification to the Corps, it appears that approximately 60 crossings of waters of the U.S. would each result in greater than a ½ acre loss of waters of the U.S., and would therefore not be eligible for authorization under NWP 12," Watson wrote.

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