Nebraska regulators have approved an alternative route for the Keystone XL pipeline, opening the tap on the only thing so far to flow through the unbuilt line first proposed nine years ago: controversy.
Montanans lined up on both sides of the Keystone XL ruling. Local governments along the proposed pipeline’s nearly 300 Montana miles liked the chances of Keystone XL actually being built. Environmentalists promised to fight the pipeline’s development.
The pipeline builder was on the phone with local governments along the line right after Monday’s ruling.
“We heard from them an hour after the decision,” said Prairie County Commissioner Todd Devlin. “They notified us what happened and they were pretty optimistic that it was a go. They’ll be making a final decision in December or January.”
The proposed Keystone XL pipeline crosses 284 miles of Montana, more than any other state. The project didn’t draw much attention along the proposed Montana pipeline route before former President Barack Obama rejected it in 2015.
Devlin said Keystone XL crosses 22 miles of Prairie County. The revenue collected from pipeline property taxes would double Prairie County’s tax base.
Montana’s university system would also benefit, as mills dedicated to public schools collect more revenue.
But the Keystone XL is far from a done deal. Oil prices and the politics surrounding the pipeline aren’t favorable.
Oil prices were hovering around $100 a barrel when Keystone XL was first proposed. At that price, oil companies found profit in surface mining Canadian tar sands oil, refining the crude and shipping it to the United States. The goal of Keystone XL was to deliver tar sands crude to Cushing, Oklahoma, and eventually refineries encircling the Gulf of Mexico.
Those same prices sparked hydraulic fracturing of Bakken shale in western North Dakota and a small portion of Eastern Montana. There were plans for a Bakken crude onramp near Baker.
But oil prices slid dramatically in October 2014 and haven't fully recovered. Production in Alberta and the Bakken has declined because of low prices.
“I know Keystone is actively seeking subscriptions to the pipeline,” said Alan Olson of the Montana Petroleum Association. “It’s a real shame it’s taken seven to eight years to get their project going, but I think there’s still a chance that they’ll be able to fill the pipeline and get it going.”
The significant hurdles ahead for Keystone XL include right-of-way negotiations with new landowners along the approved Nebraska route, said Lena Moffitt of the Sierra Club. Those negotiations with private landowners are still needed despite Monday’s ruling by the Nebraska Public Service Commission. Last week’s discovery of a 210,000 gallon leak along another Keystone pipeline helped make the case against developing Keystone XL, she said.
“We are disappointed. We are not surprised in some ways. This is the PSC not giving TransCanada what they asked for, which is a good thing,” Moffitt said. “We continue to be confident that this pipeline is never going to be built. It was a bad idea when TransCanada applied nine years ago and it still is.”
In March, the Sierra Club, along with the Billings-based Northern Plains Resource Council and other groups sued the federal government over President Donald Trump’s approval of the Keystone XL pipeline. The groups contend there wasn’t enough scrutiny before Trump’s decision was made. That lawsuit filed in federal court in Great Falls is still waiting for a hearing.
“I hope those (Nebraska) landowners will be treated fairly and won’t be forced by eminent domain if they do not want it,” said Dena Hoff of Northern Plains. “There is going to be damage. There are no pipelines that don’t leak.”