November 21, 2017 Read More →

‘No Economic Rationale’ in Keystone Go-Ahead

Los Angeles Times:

Following years of political controversy that demanded the attention of two presidents, the Nebraska Public Service Commission on Monday declared that the proposed Keystone XL pipeline was in the public interest but the 275-mile route it approved through the state was not the one preferred by TransCanada, the pipeline developer.

By a vote of 3 to 2, the five-member commission cleared the final regulatory hurdle for the proposed 1,179-mile pipeline from Hardisty, Canada, to Steele City, Neb., adding to routes already approved by Montana and South Dakota. President Trump overturned President Obama’s earlier rejection of the pipeline, and in March approved the federal permit for it to cross the U.S. border.

Despite a long series of delays and a slump in world oil prices, TransCanada this month expressed confidence that the $8-billion project will be able to move forward. Yet Monday’s action endorsing an alternative route may have made the path to success more difficult.

The pipeline company told the Nebraska commission this year that the route approved Monday was much more problematic than the one the firm preferred. The company will need to secure land from more farmers, a process that has already proved difficult. Of the 275 landowners the company needed for its preferred route, 100 have refused to sign leases for the Keystone XL pathway.

A number of analysts predict that even with the Nebraska go-ahead, the pipeline will not be built.

“There is no economic rationale, no validity to the investment calculation, no positive bottom line,” said Tom Sanzillo, director of finance for the Institute for Energy Economics and Financial Analysis, a Cleveland-based think tank, and former deputy controller responsible for managing New York’s $168-billion retirement fund. “Our view is that TransCanada is unlikely to build it.”

More: Nebraska regulators approve Keystone XL pipeline after years of controversy

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