Dakota Watchdog Warns It Could Revoke Keystone XL Approval

South Dakota regulators said they might revoke their approval of the Keystone XL oil pipeline project in case they find TransCanada was in breach of its license. The possibility of a breach has come up after the 5,000-barrel leak from TransCanada’s existing pipeline, Keystone.

The 600,000-bpd Keystone pipeline leaked crude just a couple of days before Nebraska’s Public Service Commission was to vote on the new Keystone XL. Despite the leak, the Nebraskan regulators approved the second pipeline project.

South Dakota regulators are worried about the leak since it is the third to occur in a decade, which is too many given the pipeline’s lifespan is 100 years. The state’s Public Utility Commission is currently awaiting the forensic analysis results from the spill to see whether any of the conditions it imposed on the pipeline’s operator, TransCanada, had been violated, one commission official told Reuters.

Meanwhile, a TransCanada official said he believed the leak was a sudden occurrence—instead of a gradual leak that allowed crude oil to soak into the ground. Speaking at a meeting of the Marshall County Committee—the county where the leak occurred—vice-president Erik Tatarchuk said that the leak occurred on a section of the pipeline that is four feet underground. The section will be cut and sent to the Pipeline and Hazardous Materials Safety Administration where it will be analyzed.

The Keystone pipeline transports crude oil from Canada to refineries in Oklahoma and Illinois, and passes through North and South Dakota, Nebraska, Kansas, and Missouri. Keystone XL is planned to pass through Montana and South Dakota, ending in Nebraska, where it would connect to the existing pipeline network that goes on to the Gulf Coast.

Keystone XL will be a shorter route for Canadian crude to the United States, and this route, as per Nebraskan regulators’ conditions, will pass close to that of the Keystone pipeline.

By Irina Slav for Oilprice.com