API Awaits Outcome of Final Keystone XL Hearing

In anticipation of a long-awaited Nebraska Department of Environmental Quality's (DEQ) public hearing on TransCanada's proposed Keystone XL (KXL) oil pipeline, the American Petroleum Institute (API) on Tuesday urged President Obama to approve the project. The DEQ's final hearing is scheduled to begin at 6 p.m. Central time Tuesday in Albion, Neb. On Oct. 30, 2012, the agency released its draft report on a revised KXL route that avoids the environmentally sensitive Sand Hills region in northeastern Nebraska.

"With today's final [Nebraska] public hearing, the DEQ can conclude deliberations on this project," said API Central Region Director John Kerekes in a conference call with reporters Tuesday morning.

Kerekes pointed out the conclusion of the DEQ process will clear the way for Nebraska Gov. Dave Heinemann to decide on whether to accept or reject TransCanada's revised proposal. DEQ will incorporate its responses to comments collected from the public hearing processs into its final evaluation report, which it will then forward to the Republican governor. Heinemann will have 30 days to decide on whether to accept the final report, and API anticipates a favorable decision. A pro-KXL decision by Heinemann would then go to the U.S. Department of State and the White House, which API hopes will conclude that the pipeline is in the national interest.

"This will conclude the longest pipeline application deliberation in history, which, with Nebraska's expected support we believe, will result in final approval for the project to commence," Kerekes said.

"This pipeline application application has been the most studied in history. It is now time to wrap this study up, hold this final hearing, issue a report to the Governor, then let the Governor communicate to the federal government the decision on behalf of the State of Nebraska. Then, let's get the pipeline approved in Washington."

API Downstream Manager Cindy Schild noted the $7 billion project, which would carry diluted bitumen from Canada's Oil Sands to U.S. Gulf Coast refineries, would spur the creation of 20,000 jobs in transportation, manufacturing and the building trades during construction in addition to permanent operations and maintenance jobs after completion.

"[I]n the longer term, oil sands development broadly will provide a major ongoing, job-creating stimulus to our entire economy as the dollars we spend for Canada's oil are returned to us in purchases of American goods and services," Schild added. "Nearly 90 cents of every dollar we spend in Canada are turned around and spent by Canadians here in the U.S."

Schild also reminded reporters that U.S. refineries have invested billions of dollars on upgrades to process heavier crudes in an efficient and environmentally responsible manner. In addition, she said that polls conducted by API and other organizations have consistently shown broad public support for KXL as a means of advancing energy security.

API cites the following polls showing Americans' support for KXL:

"[KXL] could help reduce our dependency on oil from less stable parts of the world and contribute to achieving self-sufficiency in transportation fuels in as few as 12 years," Schild said.

Matthew V. Veazey has written about the upstream and downstream O&G sectors for more than a decade. Email Matthew at mveazey@downstreamtoday.com. Twitter: @MatthewVVeazey

Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@rigzone.com

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