Keystone XL Clears Hurdle In South Dakota

The South Dakota Public Utilities Commission granted a permit, with 50 conditions, for the construction of the Keystone XL Pipeline in western South Dakota. The action came during an ad hoc commission meeting Thursday in Pierre, S.D.

The commission's approval of the construction permit is contingent upon Keystone meeting 50 conditions. Commissioners Dusty Johnson, Steve Kolbeck and Gary Hanson discussed and voted on seven sets of conditions within the following categories: compliance with laws, regulations, permits, standards and commitments; reporting and relationships; construction; pipeline operations, detection and emergency response; environmental; cultural and paleontological resources; and enforcement and liability for damage. Among the conditions with which Keystone must comply are:

  • filing an emergency response plan and an integrity management program with the commission prior to putting the pipeline into operation. These same documents are also required to be filed with the federal Pipeline and Hazardous Materials Safety Administration.
  • making repair, replacement or compensation to landowners for property damage or loss.
  • filing a $15.6 million bond with the commission in 2010 and a second $15.6 million bond in 2011 to ensure road damage beyond normal wear and tear that occurs during construction of the pipeline is repaired.
  • performing reclamation and maintenance of the right-of-way throughout the life of the pipeline.
  • appointing an independent public liaison officer, to be approved by the commission, to work with landowners and the PUC to resolve complaints and share information. Keystone shall also keep an updated Web site with postings about the construction and operations of the pipeline.

"There has been a great deal of work and due diligence leading up to this decision," noted PUC Chairman Johnson. "The record compiled in this case is pretty impressive. In the end, I feel the conditions we have placed upon this project ensure that it will be constructed in a manner that is sensitive to South Dakota and her people," he continued.

"Through these conditions, we are telling Keystone they must construct and operate this pipeline responsibly and with integrity," said Vice Chairman Kolbeck. "I believe the process by which this application was considered was open, thorough and fair. It should also be understood that this process is not over. Keystone has many future requirements to meet that are specific to South Dakota and not required in other states. The PUC will monitor their compliance."

"Concerned landowners brought forth a number of issues that I believe have been appropriately addressed by the conditions," stated Commissioner Hanson. "Keystone is accountable to the PUC to complete duties related to sharing information, reclamation of property and post-construction road conditions. Further, in the company's own testimony, Keystone has stated they will have full-time personnel in South Dakota to respond to an emergency," he continued.

The possibility of the pipeline leaking was an issue discussed frequently throughout the 11-month case review. Keystone filed testimony stating the chance of an oil spill is no more than one in 7,400 years for any given mile of pipe and the size of such a spill would likely be three barrels or less and would be contained within the pipeline trench.

Keystone filed the siting permit application with the PUC on March 12, 2009. The PUC held public input meetings in April 2009 in Winner, Philip and Buffalo and in November 2009 in Pierre. A three-day formal hearing was held in Pierre in November 2009, at which the commissioners heard testimony from the applicant, PUC staff, interveners and their respective experts. State law requires the commission render a decision within one year of application filing.

The commissioners as well as five PUC staff members and outside consultants spent months reviewing information filed in the docket. The process reviewed hydrology, wildlife, plants and vegetation, erosion, soil types, noise and many other areas of concern. Information sources included formal testimony from experts, exhibits and briefs from the parties and informal comments from the public.

The pipeline route in South Dakota has an estimated length of 313 miles that will cross portions of Harding, Butte, Perkins, Meade, Pennington, Haakon, Jones, Lyman and Tripp counties. The project also includes seven pump stations to be located in Harding, Meade, Haakon, Jones and Tripp counties. The plans specify two pump stations each in Harding and Tripp counties. The pipeline will transport crude oil starting in Hardisty, Alberta, Canada and ending in the Port Arthur and East Houston areas of Texas.

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