The builders of the controversial Keystone XL tar sands pipeline agreed Monday to reroute it around Nebraska's ecologically fragile Sandhills in the hope the move would shorten any delay in the project, which has posed political complications for the Obama administration.
TransCanada Corp.'s agreement to skirt the porous, watery region atop the nation's most important agricultural aquifer was celebrated by Nebraska ranchers and conservationists who have battled the pipeline.
But it posed a new dilemma for environmentalists, who had hoped to scuttle the project because of concerns about climate change, air pollution and the potential for leaks along the 1,700-mile route.
For the Obama administration, Keystone XL has been a nightmare, pitting against one another two bedrocks of support: environmentalists, who are dead set against any version of the pipeline; and organized labor, which came out by the thousands at recent public hearings across the country to support it and the jobs it would bring.
The State Department is empowered to approve or reject the project because it would originate in Canada. A decision had been expected by the end of the year but was effectively put off until after the November 2012 election when the State Department announced last week that it would study alternative routes in Nebraska.
TransCanada upped the ante Monday by splitting environmentalists, at least in the Midwest, and chipping away at Republican opposition that had surfaced in Nebraska. A letter from a State Department official to Nebraska legislators appeared to signal support for a state role in the rerouting decision, but it did not guarantee it would support any particular relocation proposal.
The announcement came during a special session of the Nebraska Legislature and won immediate support from many lawmakers. They have said they welcome the pipeline project's potential for jobs and new energy supplies but oppose any attempt to build it through a region where groundwater often lies inches below the surface.
Under the agreement with TransCanada, the Nebraska Department of Environmental Quality will join federal officials in preparing a supplemental environmental impact statement to study an alternative route around the Sandhills.
The $7-billion project would carry diluted bitumen extracted from the tar sands of central Alberta to refineries in the Midwest and the Texas Gulf Coast, picking up supplies of U.S.-produced crude from Montana, North Dakota and South Dakota along the way.
Opponents say tar sands extraction has one of the heaviest carbon footprints of any kind of oil production and have urged U.S. officials not to open the door to new Canadian extraction and export of tar sands oil. But supporters see the pipeline as a route to expanded new energy supplies from a reliable U.S. ally and, for U.S. refineries, a potential replacement for dwindling heavy crude supplies from producers such as Venezuela and Mexico.
Alex Pourbaix, president of TransCanada's energy and oil pipelines division, said company officials believed the decision to reroute the pipeline should shorten the time the State Department needs for its review of an international permit, which would be issued once the department determined the pipeline was in the national interest.
"As I understand the concern of the State Department, in listening in on their press conference last week, they indicated that the reason for the delay was the concern that was raised by Nebraskans with respect to the route, and particularly the Sandhills. We have now reached an agreement with … the Nebraska Legislature that we are going to reroute the pipeline around the Sandhills," Pourbaix said in an interview.
"I would hope this would give the State Department reason to consider shortening that time frame."
He said the Nebraska Department of Environmental Quality had indicated it could complete a review of an alternative route within six months. "Certainly if everyone is able to get that worked on sooner than 15 to 18 months, it would seem natural that people would want to move quicker on that decision," he said.
TransCanada officials made it clear they were not proposing a major route change. Most of the alternative routes studied in the initial environmental review would cost $500,000 to $1.7 billion more and could create different environmental problems by increasing the number of streams and other sensitive areas crossed, according to the environmental impact study and TransCanada.
Assistant Secretary of State Kerri-Ann Jones sent a letter assuring Nebraska legislators that state regulators would be able to work "cooperatively" with the federal government in developing the alternative route studies.
Nebraska ranchers who feared the possibility that a pipeline leak could quickly pollute the Ogallala aquifer, which underlies several states, were jubilant at Monday's announcement. Most have said they would not oppose routing the pipeline farther east in an area that still overlays the aquifer but provides a barrier of perhaps 200 feet of clay soil rather than the thin, porous sand and wetlands in the Sandhills.
"We don't have to worry about it anymore," rancher Todd Cone said after the announcement by Sen. Mike Flood, speaker of the Legislature.
"This was a huge victory today," said Jane Kleeb, director of Bold Nebraska, which has organized the fight in the state against the pipeline.
But she said activists planned to urge the federal government to reject the pipeline no matter where it goes.
"This is kind of their last Hail Mary to get their project approved. This is not them finally coming to their senses," Kleeb said of TransCanada's announcement. "On the federal level, we are still standing shoulder to shoulder with those who do not want to see a permit for this pipeline approved."
National groups that have organized public protests in Washington against the pipeline were likewise suspicious.
"A few weeks ago, [TransCanada] said the only route they could possibly do is through the Sandhills, and now they're proposing a reroute," Daniel Kessler of Tar Sands Action, one of the groups opposing the project, said in an interview.
"It's great that the aquifer is going to be protected, but the climate is not going to be protected because of a reroute."