Determined Opposition Battles Pipeline in US Regulatory Process

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By Jay Vincent, Senior Vice President for Energy

The Saint Consulting Group

I often hear from clients that “the process is the process” when it comes to federal regulatory permitting.  “If we satisfy all of the requirements”, we will get our permits.  That is often true but not necessarily always.  Unfortunately, what is often true is becoming less and less so in today’s development climate with 79% of Americans saying no to any new development in their communities.  Even more unfortunate is that critical national infrastructure is being sidelined due to this occurrence.

The case in point this month is the Keystone XL pipeline which saw a setback due to the State Department deciding it would spend the next year or so evaluating new routes.  The final decision is now pushed off until after the 2012 Presidential elections.  One has to wonder if the system of proportionally allocating electoral votes had anything to do with the decision.  With only 41.6% of the vote in the last presidential contest, the President was able to garner one Electoral College vote from Nebraska.  The President will certainly need as many electoral votes he can get, and this certainly seems to bank at least one.

The proposed Keystone Gulf Coast Expansion Project is a 1,661-mile, 36-inch crude oil pipeline that would bring Canadian crude from Alberta southeast through Saskatchewan, Montana, South Dakota and Nebraska. Regardless of the motivation behind the decision though, this case is a solid example of what determined opposition can do especially when NIMBYs, environmentalists and legislators come together to oppose a project.  Industry analysts have been calling this project a done deal for months and some for more than a year.  They were right until opponents opened other fronts in the battle against the pipeline.

Not only did they clash inside the state of Nebraska, but they brought their fight to the White House’s front lawn.  Not only did they fight inside the established process, but they opened up new fronts by introducing legislation that sought to address other concerns like eminent domain, landowners liability, road repairs, bonding , water quality and more.  In the end, pressure from all corners of political society in Nebraska along with creative organizing helped opponents score a major victory in the permitting battle.

To their credit, TransCanada is taking this temporary setback in stride.  They have now volunteered to re-route the KXL. Opponents, however, are gearing up for another battle.  While opponents may claim that they are opposed to the route, their legislative activity as well as their core beliefs suggest that no route will ever be acceptable as they are really opposed to the use of the oil sands in Canada and so are their environmental sponsors.

For more information and links to sites about the Keystone XL Pipeline project, click here.

For TransCanada information on the project, click here.

Jay Vincent is senior vice president for energy for The Saint Consulting Group, email vincent@tscg.biz or phone  312.212.8889 

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