Massive pipeline spill exposes serious flaws in Keystone XL approval process

Days before a Nebraska board is set to render its decision on Keystone XL, the original pipeline springs a major leak in South Dakota.

(CREDIT: AP Photo/Nati Harnik)
(CREDIT: AP Photo/Nati Harnik)

A leak along the existing leg of TransCanada’s Keystone pipeline has spilled at least 200,000 gallons of oil in South Dakota as of Friday, prompting the company to shut down much of the system. It is officially the largest spill in the pipeline’s history, surpassing a leak last year that sent 16,800 gallons of oil spilling onto South Dakota grasslands.

The spill comes just days before the Nebraska Public Service Commission — an independently-elected body charged with siting decisions — is set to release its final decision on the Keystone XL pipeline project, an expansion of TransCanada’s Keystone line that has served as a lightning rod for environmental and tribal groups, landowners, and fossil fuel boosters for nearly a decade.

“With an approval decision still to be made, hopefully the Nebraska Public Service Commission is paying close attention to this spill and what it means for the future,” Eliot Bostar, executive director for the Nebraska League of Conservation Voters, said in a statement. “While unfortunately it’s too late to prevent this terrible spill in South Dakota, it’s not too late to protect Nebraska’s families, farms, and communities from paying the same price.”

But spills like the one happening in South Dakota almost certainly won’t be on the Nebraska Public Service Commission’s mind when it renders its decision on Monday, because Nebraska law explicitly prohibits the panel from considering the impact of spills or leaks in its determination.

The state statute specifically says that the Public Service Commission is not allowed to consider safety issues or risks of spills,” Ken Winston, a Sierra Club attorney in Nebraska who represented landowners challenging the project before the Public Service Commission, told ThinkProgress. Winston noted that during the hearings held this summer before the commission, any testimony that spoke to the risk of spills from the pipeline — whether written or oral — was struck from the record.

The Public Service Commission’s jurisdiction over pipeline issues was created by the Major Oil Pipeline Siting Act, passed by the state legislature in 2011. The act gives the Public Service Commission the authority to approve or deny proposed pipeline routes on the basis of whether those projects were in the best interest of the state of Nebraska — but explicitly prohibits the commission from considering “safety considerations, including the risk or impact of spills or leaks from the major oil pipeline.”

Instead, the commission is allowed to consider things like risks to natural resources or risks to property values — something Winston argues is difficult to consider without also weighing how a potential pipeline spill might endanger those assets.

It’s our position that the statute is unconstitutionally vague because of the fact that you can’t consider natural resources impacts without considering spills,” Winston said.

The law was passed just one year after TransCanada’s Keystone pipeline — the one that leaked on Thursday, and which runs 3,000 miles from the tar sands of Alberta, Canada to oil hubs in Illinois and Oklahoma — was completed. Since 2010, the Keystone pipeline has leaked numerous times. One analysis from the Natural Resources Defense Council, which looked just at the pipeline’s first year of operation, found that between 2010 and 2011, the pipeline leaked 11 times, though those leaks were from pump stations and not the pipeline itself.

TransCanada’s environmental impact statement for the pipeline, by contrast, claimed that the pipeline would only suffer comparable leaks once every 12 years. Keystone has suffered at least two major releases from the pipeline itself since 2010 — the first in 2016, when the pipeline leaked 16,800 gallons of oil in South Dakota, and the second occurring on Thursday. The Pipeline and Hazardous Materials Safety Administration (PHMSA), the federal agency which governs pipeline safety, lists any spill of more than 2,100 gallons as “significant.”

“TransCanada’s tagline should be the leakiest pipelines ever built,” Jane Kleeb, chair of the Nebraska Democratic Party and director of Bold Nebraska told ThinkProgress via email. “We are confident the Public Service Commissioners know how risky this pipeline is and that they will side with Nebraskans over a foreign oil company.”

TransCanada has estimated that the risk of a significant spill for the Keystone XL pipeline — which would expand the existing Keystone pipeline’s capacity significantly — would be about 11 incidents over the estimated 50-year lifespan of the pipeline. That number has been called into question by at least one outside analysis, however, which suggests that the true figure could be closer to 91 major spills over a 50-year period.

While the Public Service Commission is not allowed to consider safety and spill risks associated with the pipeline, those issues are supposed to be taken into account through an environmental impact study. The Keystone XL pipeline has undergone two such studies, one of which was conducted by the State Department in 2014 and one of which was conducted by the Nebraska Department of Environmental Quality in 2012.

When the Trump administration granted a presidential permit to the Keystone XL pipeline in March — necessary because the project crosses an international border, and which the Obama administration had previously denied — officials relied on old environmental impact studies rather than conducting new ones. Environmental groups have already challenged that permit on the grounds that it violates the National Environmental Policy Act (NEPA) by relying on outdated information about the pipeline’s impacts on the environment and the economy.

TransCanada itself has suggested that there might not be enough commercial support for the pipeline to justify its construction — the pipeline was first proposed at a time when estimates suggested that the price of oil would never fall below $100 a barrel throughout the lifetime of the Keystone XL pipeline. Oil prices are currently trading at about $56 a barrel.

The environmental studies were also all conducted before any of the major pipeline spills occurred along the Keystone route.

The administration is looking at information that is several years old, and there have been a lot of things that have happened since 2010 — floods and droughts and impacts on a variety of natural resources,” Winston said. “We would argue that all those things have not been considered.”

Despite the fact that spill risks cannot be considered by the Public Service Commission, opponents of the pipeline are hopeful that the commission will choose to deny the pipeline for suite of other reasons.

I would argue that even if they aren’t supposed to consider leaks and spills, they ought to consider the competence of the operator,” Winston said. “I don’t know that the Public Service Commission is going to do. But it is our position that TransCanada failed to meet their burden of proof, which is to show that the pipeline is in the public interest, and that there is strong evidence for denial.”