Keystone Pipeline
The Keystone Pipeline System is an oil pipeline system in Canada and the United States, commissioned in 2010 by TransCanada. It is owned by South Bow, since TC Energy's spin off of its liquids business into a separate publicly traded company, effective October 1, 2024. It runs from the Western Canadian Sedimentary Basin in Alberta to refineries in Illinois and Texas, and also to oil tank farms and an oil pipeline distribution center in Cushing, Oklahoma.
TransCanada Keystone Pipeline GP Ltd, abbreviated here as Keystone, operates four phases of the project. In 2013, the first two phases had the capacity to deliver up to per day of oil into the Midwest refineries. Phase III has capacity to deliver up to per day to the Texas refineries. By comparison, production of petroleum in the United States averaged per day in first-half 2015, with gross exports of per day through July 2015.
A proposed fourth pipeline, called Keystone XL Pipeline, would have connected the Phase I-pipeline terminals in Hardisty, Alberta, and Steele City, Nebraska, by a shorter route and a larger-diameter pipe. It would have run through Baker, Montana, where American-produced light crude oil from the Williston Basin of Montana and North Dakota would have been added to the Keystone's throughput of synthetic crude oil and diluted bitumen from the oil sands of Canada. It is unclear how much of the oil transported through the pipeline would have reached American consumers instead of being exported to other countries, as most of it would have been refined along the Gulf Coast.
The pipeline became well known when the proposed KXL extension attracted opposition from environmentalists with concerns about climate change and fossil fuels. In 2015, KXL was temporarily delayed by President Barack Obama. On January 24, 2017, President Donald Trump took action intended to permit the pipeline's completion. On January 20, 2021, President Joe Biden signed an executive order to revoke the permit that was granted to TC Energy Corporation for the Keystone XL Pipeline. On June 9, 2021, TC Energy abandoned plans for the Keystone XL Pipeline.
Description
The Keystone Pipeline system consisted of the operational Phase I, Phase II, and Phase III, the Gulf Coast Pipeline Project. A fourth, proposed pipeline expansion segment Phase IV, Keystone XL, failed to receive necessary permits from the United States federal government in 2015. Construction of Phase III, from Cushing, Oklahoma, to Nederland, Texas, in the Gulf Coast area, began in August 2012 as an independent economic utility. Phase III was opened on January 22, 2014, completing the pipeline path from Hardisty, Alberta to Nederland, Texas. The Keystone XL Pipeline Project revised proposal in 2012 consists of a new pipeline from Hardisty, Alberta, through Montana and South Dakota to Steele City, Nebraska, to "transport of up to of crude oil from the Western Canadian Sedimentary Basin in Alberta, Canada, and from the Williston Basin region in Montana and North Dakota, primarily to refineries in the Gulf Coast area". The Keystone XL pipeline segments were intended to allow American crude oil to enter the XL pipelines at Baker, Montana, on their way to the storage and distribution facilities at Cushing, Oklahoma. Cushing is a major crude oil marketing/refining and pipeline hub.Operating from 2010 to 2021, the original Keystone Pipeline System is a pipeline delivering Canadian crude oil to U.S. Midwest markets and Cushing, Oklahoma. In Canada, the first phase of Keystone involved the conversion of approximately of existing natural gas pipeline in Saskatchewan and Manitoba to crude oil pipeline service. It also included approximately of new pipeline, 16 pump stations and the Keystone Hardisty Terminal.
The U.S. portion of the Keystone Pipeline included of new, pipeline in North Dakota, South Dakota, Nebraska, Kansas, Missouri, and Illinois. The pipeline has a minimum ground cover of. It also involved construction of 23 pump stations and delivery facilities at Wood River, Illinois and Patoka, Illinois. In 2011, the second phase of Keystone included a extension from Steele City, Nebraska, to Cushing, Oklahoma, and 11 new pump stations to increase the capacity of the pipeline from per day.
Additional phases have been in construction or discussion since 2011. If completed, the Keystone XL would have added per day increasing the total capacity up to per day. The original Keystone Pipeline cost US$5.2 billion. From January 2018 through December 31, 2019, Keystone XL development costs were $1.5 billion.
History
The project was proposed in 2005 by the Calgary, Alberta-based TransCanada Corporation, and was approved by Canada's National Energy Board in 2007. On September 21, 2007, the National Energy Board of Canada approved the construction of the Canadian section of the pipeline, including converting a portion of TransCanada's Canadian Mainline gas pipeline to crude oil pipeline, on September 21, 2007.In October 2007, the Communications, Energy and Paperworkers Union of Canada asked the Canadian federal government to block regulatory approvals for the pipeline, with union president Dave Coles stating, "the Keystone pipeline will exclusively serve US markets, create a permanent employment for very few Canadians, reduce our energy security, and hinder investment and job creation in the Canadian energy sector".
On January 22, 2008, ConocoPhillips acquired a 50% stake in the project.
On March 17, 2008, during the final year of the Presidency of George W. Bush, the United States Department of State issued a Presidential Permit authorizing the construction, maintenance and operation of facilities at the United States and Canada border. In June 2008, the Keystone XL extension was proposed. Later that year, TransCanada began the process of becoming the sole owner of the pipeline. In 2009 it bought out ConocoPhillips' shares and reverted to being the sole owner. It took TransCanada more than two years to acquire all necessary state and federal permits for the pipeline. Construction took another two years.
In September 2009, the NEB – replaced in 2019 by the Canadian Energy Regulator – started hearings. The pipeline, from Hardisty, Alberta, Canada, to Patoka, Illinois, United States, became operational in June 2010. Later that year, the South Dakota Public Utilities Commission granted a permit to proceed. and in March 2010, the National Energy Board approved the project.
In June 2010, Keystone Pipeline was completed and was delivering oil from Hardisty, Alberta, over to the junction at Steele City, Nebraska, and on to Wood River Refinery in Roxana, Illinois, and Patoka Oil Terminal Hub north of Patoka, Illinois.
On July 21, 2010, the Environmental Protection Agency criticized the State Department's draft environmental impact study for neglecting concerns about oil spill response plans, safety issues and greenhouse gas.
In February 2011, the Keystone-Cushing extension was completed running from Steele City to a tank farm in Cushing, Oklahoma.
On June 3, 2011, Pipeline Hazardous Materials and Safety Administration issued TransCanada a Corrective Action Order, for Keystone's May 2011 leaks. On April 2, 2016, PHMSA issued a CAO to TransCanada for a leak in Hutchinson County, South Dakota, and again on April 9. The pipeline restarted at a reduced operating pressure on April 10 after the U.S. regulator approved the companies corrective actions and plan. A leak occurred in Marshall County, South Dakota in November 2017. This leak occurred early in the morning on November 16, 2017, near Amherst, South Dakota and was contained shortly after detection south of the Ludden pump station.
On August 26, 2011, the final environmental impact report was released, stating that the pipeline would pose "no significant impacts" to most resources if environmental protection measures are followed, but it would present "significant adverse effects to certain cultural resources".
In September 2011, Cornell ILR Global Labor Institute released the results of the GLI Keystone XL Report, which evaluated the pipeline's impact on employment, the environment, energy independence, the economy, and other critical areas.
On November 10, 2011, the Department of State postponed a final decision while investigating "potential alternative routes around the Sandhills in Nebraska" in response to concerns that the project was not in the United States' national interest. In its response, TransCanada pointed out fourteen different routes for Keystone XL were being studied, eight that impacted Nebraska. They included one potential alternative route in Nebraska that would have avoided the entire Sandhills region and Ogallala Aquifer and six alternatives that would have reduced pipeline mileage crossing the Sandhills or the aquifer.
In March 2012, Obama endorsed building the southern segment that begins in Cushing, Oklahoma. The President said in Cushing, Oklahoma, on March 22, "Today, I'm directing my administration to cut through the red tape, break through the bureaucratic hurdles, and make this project a priority, to go ahead and get it done."
On January 22, 2014, the Gulf Coast Extension was completed, running from Cushing to refineries at Port Arthur, Texas.
In January 2014, the U.S. Department of State's January 2014 "Final Supplemental Environmental Impact Statement" said that, "because of broader market dynamics and options for crude oil transport in the North American logistics system, the upstream and downstream activities are unlikely to be substantially different whether or not the proposed Project is constructed".
On January 9, 2015, the Nebraska Supreme Court cleared the way for construction, after Republican Governor Dave Heineman had approved it in 2013.
On 14 November 2014, the House of Representatives passed a bill approving the construction of the Keystone XL Pipeline in a 252–161 vote; however, the bill was rejected by the Senate four days later in a 59-41 votes, failing to reach the 60 votes threshold.
A second bill approving the construction of the pipeline was passed in a 62–36 vote on 29 January 2015 and by the House in a 270–152 vote on 11 February, but on 24 February it was vetoed by President Obama, who said that the approval decision should rest with the Executive Branch. The Senate was unable to override the veto by a two-thirds majority, with a 62–37 vote.
On September 29, 2015, TransCanada dropped their lawsuit against Nebraska landowners who had refused permission for pipeline easements on their properties in order to exercise their eminent domain.
On November 3, 2015, U.S. Secretary of State John Kerry determined that the project was not in the public interest. Kerry found that there was a "perception" among foreigners that the project would increase greenhouse-gas emissions, and that, whether or not this perception was accurate, the decision would "undercut the credibility and influence of the United States" in climate-change-related negotiations.
On November 6, 2015, the Obama administration rejected the Keystone XL pipeline project, citing economic and environmental concerns. Financial commitment to completion of the pipeline was also weakened by technological factors. Innovations in fracking had increased domestic oil production and, according to the EIA, reduced demand of oil from foreign countries to an all-time low since 1985. Shifts to gasoline fuel for cargo vehicles, new technologies promoting fuel efficiency, and export restrictions that reduced the price of oil also played a part.
In mid-2016, a lateral pipeline to refineries at Houston, Texas and a terminal was completed, and was online in 2017.
File:Donald Trump signs orders to green-light the Keystone XL and Dakota Access pipelines.jpg|right|thumb|Donald Trump signing the Presidential memoranda to advance the construction of the Keystone XL and Dakota Access pipelines, January 24, 2017
On January 24, 2017, in his first week in office, President Donald Trump signed a presidential memorandum to revive both Keystone XL pipelines, which "would transport more than per day of heavy crude" from Alberta to the Gulf Coast.
On March 9, 2017, the Canadian Prime Minister Justin Trudeau and Premier of Alberta Rachel Notley attended North America's largest energy conference – CERAWeek in Houston, Texas. An Angus Reed Institute poll published that week showed that 48% of Canadians supported the revival of the Keystone XL pipeline project. The pollsters said that the support for the Keystone pipeline project by provincial NDP government and the federal Liberal government under Trudeau had a positive impact on Canadians' attitudes of the project.
On March 24, 2017, Trump signed a presidential permit to allow TransCanada to build the Keystone XL pipeline. The State Department issued a new Record of Decision on the same facts as before, but reversed itself to find that granting the permit would be in the national interest.
In November 2017, the Nebraska Public Service Commission approved the construction of the pipeline, but via an alternative route which is longer and deemed to have less environmental impact than two other routes that were considered. This proved to be a major setback for TransCanada since they would have "years of new review and legal challenges". TransCanada asked Nebraska to reconsider this decision. They also worked with Pipeline and Hazardous Materials Safety Administration to determine the structural cause of a leak in South Dakota on November 21, 2017.
In November 2018, U.S. District Judge Brian Morris enjoined construction of the pipeline and vacated the new permit because the policy reversal violated the Administrative Procedure Act, the National Environmental Policy Act, and the Endangered Species Act.
In February 2019, District Judge Morris denied a request by TransCanada Corporation to begin constructing worker camps for the pipeline although the company could begin construction of pipe storage and container yards as long as they were outside the proposed pipeline's right-of-way.
In March 2019, Trump revoked the prior permit and himself directly issued a new permit for the pipeline.
In May 2019, TransCanada Corporation changed its name to TC Energy Corporation, as its business extends into the United States and Mexico, as well as Canada where it has pipelines, power generation and energy storage operations.
In June 2019, the United States Court of Appeals for the Ninth Circuit granted the Justice Department's motion to lift the injunction blocking construction and found that the new permit mooted the prior Montana lawsuit.
In August 2019, the Nebraska Supreme Court affirmed the Nebraska Public Service Commission's approval of TransCanada's pipeline application.
In October 2019, the State Department solicited comments on its new draft supplemental environmental impact statement.
In March 2020, the Premier of Alberta Jason Kenney, who campaigned on promoting the provincial oil and gas industry and promoted it by repealing the carbon tax and establishing an energy war room, announced that the UCP government was taking an "equity stake" and providing a "loan guarantee", which amounts to a "total financial commitment of just over $7 billion" to the Keystone XL project.
On March 31, 2020, CEO Russ Girling announced that TC Energy "will proceed with construction of the Keystone XL Pipeline" and thanked President Donald Trump, Alberta Premier Jason Kenney, and other government officials for "support and advocacy" for Keystone XL. Girling said that this construction, which will take place during the COVID-19 pandemic, will follow government and health authorities guidance, to ensure the protection of workers, their families, and surrounding communities from the virus.
On April 15, 2020, District Judge Brian Morris issued a suspension of the pipeline construction after the plaintiffs, the Northern Plains Resource Council, alleged the project was improperly reauthorized back in 2017. In the summary judgment, the judge agreed that the Endangered Species Act was violated, thereby voiding the permit.
On May 28, 2020, the United States Court of Appeals of the Ninth Circuit denied a motion to stay the District Judge's ruling. This prompted Solicitor General Noel J. Francisco to file an application for stay to the Supreme Court. The application was granted a hearing.
On July 6, 2020, in the US Army Corps of Engineers v. Northern Plains Resource Council case, the Supreme Court of the United States ordered all Keystone XL work be halted. The order, however, did not affect any other present or future pipeline construction in the United States, and would be in force until the circuit court, and then the Supreme Court deliver their final rulings. In response, TC Energy stated that the U.S. part of the project would be reassessed ; the Canadian part would proceed as before.
On January 20, 2021, United States President Joe Biden revoked the permit for the pipeline on his first day in office citing protecting the environment as a reason for ending the permit.
On June 9, 2021, the Keystone XL project was abandoned by its developer. At the time of the project's cancellation, approximately 8% of the pipeline had been constructed.
On January 22, 2025, Donald Trump, who had become President again, rescinded Biden's executive order that canceled the pipeline's permits, a move that could reopen potential construction of the oil system.