Days After Oil Spill, Construction Approved for TransCanada's Keystone XL Pipeline

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The route of the new pipeline, which would carry 830,000 barrels a day of crude, would not cross any part of the state's ecologically delicate Sandhills region.

The independent commission had come 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.

And while the final approval should mean that construction can begin, the realities are more complex, and even TransCanada itself says it will now have to review a number of factors relating to the pipeline's economic and political feasibility. The decision, though, wasn't wrinkle-free: The panel mandated an alternative route that was immediately targeted by the project's opponents as lacking adequate vetting.

The Sierra Club highlighted TransCanada's own criticism of the mainline alternative route in its application, where it said the alternative would increase the crossing of highly sensitive soils and ecosystems.

The decision by the Public Service Commission (PSC) comes just days after a section of the pipeline in nearby South Dakota leaked 210,000 gallons of oil. The proposed extension to the existing Keystone pipeline has been a lightning rod in a growing movement among environmentalists to mitigate the effects of global warming by preventing new energy infrastructure from being built. She noted that the company said it had consulted with the Southern Ponca Tribe, but Rhoades said that resides in Oklahoma. Many oil sands producers now ship crude by railroad, which is not immune from accidents. But it opens new questions that she said her group would likely explore in federal court. Since rail is a more expensive form of transport, heavy Canadian crude prices will need to trade at a bigger discount to West Texas Intermediate futures.

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The Association of Oil Pipe Lines hailed the decision, saying that Nebraska sales and construction equipment use tax revenues would generate $16.5 million for state government.

Omaha attorney David Domina, who's been fighting construction of the Keystone XL for more than five years, represented more than 90 landowners in the case, many of whom had fought the project to a standstill two years ago. Some landowners in attendance found out that their land would no longer be on the pipeline route, while others learned that a path through their property had been approved.

The Sierra Club also greeted the commission's decision as a partial victory.

TransCanada is now "assessing how the decision would impact the cost and schedule of the project", Russ Girling, TransCanada's chief executive officer, said in a statement. "It's a matter of when and I wouldn't want my land to be contaminated, with the water underneath".

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