Nebraska court ruling to further delay US approval of Keystone XL

20 February 2014 14:35 Source:ICIS News

TORONTO (ICIS)--An adverse court ruling in Nebraska this week will likely further delay US approval of the northern leg of the controversial Keystone XL pipeline project to ship oil from Alberta to the US, analysts said on Thursday.

A Nebraska district court sided with affected land owners who claimed that the law enabling Keystone XL to be routed through the state was unconstitutional. The law allowed for the use of compulsory land purchases. Nebraska’s government approved a revised route for the project last year.

“This will probably push [completion] out, to some degree,” Stephen Caldwell, partner at Toronto-based asset management firm Toron AMI, said.

The long-delayed 1,179-mile northern leg of TransCanada’s Keystone XL project, which crosses the Canada-US border, has yet to be approved by the US government. The project’s southern leg from Cushing, Oklahoma to the US Gulf Coast is in operation.

“Nobody know what the US decision will be, and when it’s going to come,” Caldwell said when asked about the long US approval process.

Investment bank RBC Capital also said the court ruling would likely result in the US government further delaying a final decision on the controversial project.

The bank added that court ruling was not about the pipeline’s route itself, but about the legality of the process. As such, TransCanada could reapply for the same route through Nebraska’s Public Service Commission, RBC said in a research note.

Last month, the US State Department issued a favourable environmental impact report about Keystone XL. TransCanada has said it could complete the project within two years following final US approval.

By Stefan Baumgarten