Delay Doesn’t Diminish Keystone XL’s Merits

Mark Green
Posted July 6, 2015

Another sign of the times on the Keystone XL pipeline: South Dakota’s Public Utilities Commission (PUC) is weighing pipeline builder TransCanada’s request for a reissued construction permit because the company’s original permit died of old age – victimized by the White House’s failure to decide on Keystone XL despite nearly seven years of review.

That’s right. TransCanada’s  first construction permit for the 314 miles of the pipeline that would cross South Dakota expired last summer. You could say the cause of death was neglect – neglect by the White House, with its Keystone XL review approaching the seven-year mark this fall.

So, TransCanada seeks a reissued permit. The PUC is scheduled to hold a public input session Monday night, followed by evidentiary hearings July 27 and Aug. 4.

A couple of points. The first is to underscore again the absurd and unfair way the White House has kept Keystone XL in suspended animation, causing a state construction permit that’s good for four years to lapse. The second is to point out that the economic and energy merits of building Keystone XL – for South Dakota and the U.S. – remain unchanged, basically unchallenged by pipeline opponents:

• Construction would bring 3,000 to 4,000 direct and indirect jobs to South Dakota, according to U.S. State Department environmental and economic analysis. For the entire U.S., State estimates the project would support more than 42,000 jobs during its construction phase.
• The pipeline in South Dakota would support more than $100 million in earnings for laborers. Nationwide, State estimates the project would put $2 billion in the pockets of workers and add $3.4 billion to U.S. GDP.
• According to State, seven of the nine South Dakota counties the pipeline would cross would see their property tax base increase by more than 10 percent. In some counties the increase would be close to 100 percent.
• The pipeline would bring more than 800,000 barrels of oil per day from Canada and the U.S. Bakken region to our Gulf Coast refineries.

We can be confident that State’s Keystone XL estimates are sound because of the performance of the original Keystone – which already crosses South Dakota. ExxonMobil’s Ken Cohen writes:  

The five-year-old Keystone pipeline brings oil from Canada’s oil sands to refineries in the Midwest. It was permitted in three years and built in two. Since then, it has been an engine of economic growth and development. More than $5 billion of private investment was spent on construction of the original Keystone – a much-needed boost to the U.S. economy in the Great Recession after the financial crisis. More significant is the economic contribution Keystone continues to make. It moves 600,000 barrels of oil every day that go to power the lives of American customers and fuel their activities at home, work, and play. … The baffling refusal by the Obama administration to greenlight KXL makes no sense on its own. Compared to the five-year, unqualified success of the original Keystone project, it makes even less sense.

Keystone XL promises to bring similar economic benefits and greater U.S. energy security as we strengthen our partnership with Canada, America’s No. 1 source of imported oil. Keystone XL would be safe, with TransCanada having agreed to more than 50 special conditions for its construction and operation.

We trust that South Dakota will issue a new construction permit for Keystone XL. What made sense from an energy, economic and safety standpoint in 2010 still makes sense now.