Keystone XL

Nebraska Regulators Approve Keystone XL Pipeline

A big defeat for anti-pipeline activists.


Eric Broder Van Dyke/Dreamstime

The Nebraska Public Service Commission has voted 3–2 to allow TransCanada to route the Keystone XL pipeline through the Cornhusker State. The 1,200-mile pipeline will transport more than 800,000 barrels of crude daily from Canada's oilsands in Alberta to refineries on the U.S. Gulf Coast. The pipeline was approved by the NPSC despite the fact that 5,000 barrels of oil leaked just last week from the older Keystone pipeline in South Dakota. The commissioners did revise the pipeline's path, moving it further east from the Ogallala aquifer that underlies the Sand Hills region of the state.

The pipeline has long been opposed by environmentalists worried about climate change, landowners who don't want the pipeline to cross their property, and Native American tribes concerned that spills could contaminate their water supplies.

After the U.S. State Department kept sending draft environmental assessments of the project back to reviewers until they came up with the right answer, President Barack Obama denied TransCanada a border-crossing permit in 2015 by ruling that the construction the pipeline was not in the national interest. In March, President Donald Trump reversed Obama's decision.

In 2012, climatologist Chip Knappenberger, who works with the libertarian Cato Institute, calculated that keeping crude from Canada's oilsands would reduce the annual increase in global temperatures due to carbon emissions by "one ten thousandths of a degree Celsius of temperature rise from the Canadian tar sands oil delivered by the Keystone XL pipeline each year."

Considering that TransCanada first proposed the pipeline in 2008, when the price of oil was about double what it is today, is the project still an economically viable proposition? In statement released earlier this month, the company claimed that "commercial support for the project" will "be substantially similar to that which existed when we first applied for a Keystone XL pipeline permit."

Despite the commission's approval, construction is not a done deal. Some 90 Nebraska landowners are expected to fight construction of the pipeline through their property in the courts, according to The New York Times. But the legal precedents for preventing the use of eminent domain to obtain rights-of-way for "public use" projects like pipelines is not promising.

Disclosure: Back in 2011, I took a junket to the Canadian oilsands that was sponsored by the American Petroleum Institute. The institute neither asked for nor had any editorial control over my reporting of that trip. For more background, see my articles "The Man-Made Miracle of Oil from Sand" and "Conflict Oil or Canadian Oil?"

NEXT: Is Donald Trump Responsible for the Attack on Rand Paul?

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  1. The cost of fracking has also dropped. It is very much economical.

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  2. The cost of fracking has also dropped. It is very much economical.

    1. J: Get oil out of oilsands is a bit more complicated than just fracking.

      1. True but the cost as come down steadily over the last few years. It is one of the great industrial miracles of our age. The emergence of cheaper oil from shale and tar sands is a much more significant development than anything regarding renewable energy that you seem to frequently write about.

      2. What’s up with that link?

        1. J: Hmm. The schematic of oilsands production to which I linked is gone. Hmmm.

          1. It’s the anti-kochtapus hackers Ron!
            *puts tin-foil around head and keyboard*

      3. Fracking has nothing to do with oil sands. Old oils sands are strip-mined and the sand separated out from the bitumen. Now they use SAGD (steam assisted gravity drained), which basically pumps steam underground to melt the bitumen, which is pumped back up. This is expensive, but less than strip mining. In the future, the plan is to ignite the bitumen, and use the heat from the controlled burn to melt it. This sounds very risky (I’m assured that controlling the O2 downhole controls the burn) but it uses very little energy, and that it does use is from the bitumen itself.

    2. One doesn’t frack oil sands. They are oil suspended in loose sand near the surface. Fracking is about cracking tight rock deep underground.

  3. How is mass eminent domain even remotely defensible to build a shortcut in a private, foreign company’s oil pipeline?

      1. .Generally, once the project is approved by the local state utility commission or the Federal Energy Regulatory Commission (FERC), the utility company can proceed with eminent domain to acquire property and construct the project. Without special circumstances, you won’t be able to stop the project during the eminent domain process.

        Because, FERC you that’s why.

      2. They come and put a pipeline under your land that in no way inhibits your use of it and they pay you quite well for doing it. There are a lot of infringements on property rights that are worth weeping about. But this really isn’t one of them.

        Beyond just raw principle, why should one or two landowners hold up a project that will benefit millions of people? Yes, I know principle matters. But understand that is the only thing these landowners have going for them. Since there is only so much political capital available, it would better for it to be spent on landowners whose cases have more than just raw principle going for them.

        1. Assuming they are planning to bury the line.

          1. Which they do in every case outside of the Arctic where the permafrost prevents it. There is no reason to build a pipeline above ground if you can avoid it. It just subjects it to the elements and makes it higher maintenance. Outside of the Arctic, I have never seen an above ground pipeline.

          2. Other then crossing swamps and permafrost and a few rivers, I don’t know of any pipelines that are not buried.

            As that they are generally 8 feet down, they don’t impede farming, grazing or wildlife.

            1. Alaskan pipeline is all above the permafrost.

        2. I don’t disagree in general with your position on this one John, but it’s interesting that the land owners are likely to get shafted, while the politicians who are actually the ones performing the seizure of private assets are the ones that make the money. If only TC would have pooled those resources to gain access to private lands, I’m sure this would have been a better deal for all (except the politicians).

          I’d feel much better about eminent domain if it were done at the local level.

          1. How are the landowners getting shafted? They deserve compensation for whatever damage is done to their land or inconvenience caused by building the pipeline. I don’t see why the landowners are necessarily entitled to get rich.

            1. I certainly don’t know the details in this case, which is why I said “likely to get shafted”. But any time you have this level of lobbying for eminent domain makes you wonder why there had to be such a need for federal government involvement. Maybe it’s because of the access to public lands, but likely it’s being used to twist the arm of John Q. Public.

              If taxes are theft, then what is eminent domain?

              1. LK: One difference from taxes – according to the Fifth Amendment … nor shall private property be taken for public use, without just compensation.

                1. They have a point in principle. But they don’t seem to have much else going for them.

                  1. They have a point in principle. But they don’t seem to have much else going for them.

                    This statement tells us all that we need to know about your position.

                2. Ron: I understand the Constitutional argument here, but of course we know as libertarians that natural rights such as property rights aren’t bestowed upon us by the government. A good summary of eminent domain can be found here. My point is simply that these cases where ED is exercised are best done at the local level. In the case of government seizing assets for a large international corporation, you wonder why this deal couldn’t be completed between the corporation and the people themselves, or at least much more locally. The link provided above points out that ED was largely exercised at the local level prior to the Civil War.

                  I hope that the Keystone Pipeline is completed, because I think the benefits are enormous. The amount of crony capitalism involved in the ED claims in this case certainly bring a lot of questions about just how much this benefits the public, vs the private companies advocating for taking the property.

                3. Pipeline easements are not free, and they don’t take ownership of the land, just use of the subsurface.

                  Land owners are PAID.

            2. They deserve compensation for whatever damage is done to their land or inconvenience caused by building the pipeline.

              And when the pipeline leaks or destroys groundwater or surface marshes/flyway/environmental (ie the land is ‘abusus’ ) – which may well affect not the current landowner but a future generation – that future destruction is not necessarily compensated. the pipeline owner may be out of business then. Any ‘sinking fund’ may not be sufficient. Govt ‘takeover’ of that then polluted land will then occur – but the future generation will have to pay that cost of restoration while the current generation (including the current landowner) receives all the benefits and pays for none of that abusus.

              1. If they are out of business, then nothing is going through the pipeline, and therefore nothing can leak. Pipelines are literally just pipe in the group. What “restoration” are you talking about?

          2. Eco law foundations make the rounds, looking for “affected parties” to front for law suits, to run up project costs and delay implementation.

            For several years, the DOJ uniformly ruled in favor of the Eco-law foundations, in settlements from the federal Judgement Settlement Fund, handing them hunderds of Millions of untracable taxpayer dollars. It was a great money making scam.

        3. Becuase the lawyers will make lots of money off of it.

        4. Becuase the lawyers will make lots of money off of it.

          1. You can say that again! Oh wait…you did…

  4. Ever since that Rockefeller prick made petroleum distillates cheap and plentiful we’ve been on this non-stop binge of making cheaper and more plentiful fuels (and eventually plastics). And now this – more cheaper, more plentiful. Damn my A/C and damn the whales.

  5. A big defeat for anti-pipeline activists.

    Alternatively phrased: A big win for sanity.

    1. This^^^^Warren Buffet has a sad, though.

    2. Higher pollution per gallon of fuel.

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