Nebraska environment report favors revised Keystone XL pipe plan

Fri Jan 4, 2013 2:24pm EST
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By Timothy Gardner

WASHINGTON (Reuters) - The controversial Keystone XL oil pipeline received a boost on Friday when Nebraska regulators said its proposed new route would avoid many of the ecologically-sensitive areas that led the U.S. government to block it last year.

The new route for the $5.3 billion Alberta-to-Nebraska pipeline, backed by TransCanada Corp, would avoid the ecologically sensitive Sand Hills region but would still cross part of the massive Ogallala aquifer, the Nebraska environment regulator said.

If built, Keystone XL would link Canada's booming oil sands production with the refineries and ports of Texas' Gulf Coast, carrying some 830,000 barrels of oil per day. The project has been targeted by environmentalists concerned about carbon emissions from oil sands production and the risks posed by oil spills to water supplies in the Midwest.

The U.S. State Department is working with Nebraska as it forms its own environmental assessment of pipeline that is one piece of a continental realignment of oil flows between Canada and the United States.

Nebraska Governor Dave Heineman now has 30 days to decide whether he supports the new Keystone XL route.

The State Department has said it will soon release its environmental assessment of Keystone XL, a necessary step before the Obama administration decides the fate of the project, which is expected to be in the coming months.

President Barack Obama last year rejected TransCanada's initial Keystone XL application after environmentalists raised concerns about the Nebraska route.

Obama threw his support behind the southern half of the line, which is already under construction and would drain a glut of U.S. crude in the middle of the country caused by a surge in output from new sources in places such as North Dakota. The section does not need federal approval as it does not cross the national border.   Continued...