Crude oil has spent much of the last five months moving higher, mostly on news of OPEC production fluctuations and instability in the region.

That has North American oil companies looking to expand market share and footprint.

This week, the long-ballyhooed Keystone XL pipeline took a major step toward completion of its U.S. route, while the company also dealt with a leak in the High Plains.

Paul Yeager reports.

The five-member Nebraska Public Service Commission approved the Keystone main line alternative route, but not without some dissent.

Crystal Rhoades, Nebraska Public Service Commissioner: "I'm going to be voting ‘no’ on this application for the following reasons: One, the route violates the due process of land owners. There are at least 40 land owners along the approved route who may not even know that their land is in this pipeline's path. Since they may not know that they are in the path of the pipeline, they may not have participated in this proceeding. And my not have had an opportunity to make a case before this commission."

 Crystal Rhoades and another member voted against the request by TransCanada to clear the last major regulatory hurdle across Nebraska. The measure passed by a 3-2 voice vote.

The $8 billion, 1,179-mile pipeline would deliver oil from Alberta, Canada to Texas Gulf Coast refineries. President Obama had rejected the project in 2015 citing concerns about carbon pollution. President Trump revived the plan in March and approved a permit. The new pipeline, if the company proceeds, is expected to carry 830,000 barrels of oil a day.

The discovery late last week of a 210,000 gallon oil leak from the Keystone pipeline in Marshall County, South Dakota would seem to have been poor timing for the vote in Nebraska. However, a Cornhusker state law passed in 2011 prevents the commission from factoring pipeline safety or the possibility of leaks into its decisions as those events are deemed federal safety issues.

Additional crews were sent to the location of the spill in northeastern South Dakota. Officials with TransCanada Corporation say about 150 people have been on-site to deal with clean-up as well as protecting nearby bodies of water and drinking water systems.

Some landowners were skeptical about the quality of work when the pipeline was installed and this incident hasn’t changed their minds, including those in the conservation and family agriculture group, Dakota Rural Action.

Kent Moeckly, Marshall County Landowner, Dakota Rural Action member: "Well, it's like the other shoe dropping. We were told by a lot of people when TransCanada put this thing in the ground that the conditions -- it was wet, sloppy conditions and they just drove it in in a hurry, because time is money and we were very, very hesitant about what was going to happen.”

 

This latest incident is one of the 20 largest onshore petroleum spills since 2010 according to U.S. Department of Transportation. US DOT records show 17 of those spills have been the same size or larger than the most recent incident.

Recovery crews are now clearing tainted soil and conducting safety testing to determine an exact cause of the incident.

For Market to Market, I’m Paul Yeager.