Keystone oil pipeline backers win in SD, set back by White House

JAMES NORD, Associated Press

Keystone oil pipeline backers win in SD, set back by White House

Backers of the long-delayed Keystone XL pipeline got some relief in South Dakota on Tuesday, when state regulators voted down an effort from project opponents to throw out a request for the re-approval of a portion of the pipeline.

But the move from the South Dakota Public Utilities Commission came as the White House announced that it would veto a bill to authorize construction of the pipeline in a blow to Republicans' first legislative priority in the new GOP-controlled U.S. Senate.

The pipeline would transport oil from the Canadian tar sands to Nebraska, where it would connect with existing pipelines to carry more than 800,000 barrels of crude oil a day to refineries along the Gulf Coast. It could also transport crude from the Bakken oil field.

The state initially authorized the project in 2010, and state rules dictate permits must be re-approved if the construction of the project does not start within four years of their issuance. The Public Utilities Commission is now considering TransCanada's certification that it can still complete the project while meeting the conditions of the 2010 approval.

The panel on Tuesday voted against arguments from a handful of Indian tribes and environmental groups to dismiss TransCanada Corp.'s request to re-approve the portion of the Keystone XL pipeline going through South Dakota. The panel said it was premature to dismiss TransCanada's request before fully considering the case. Final arguments are scheduled for May.

TransCanada spokesman Mark Cooper said in a statement that the company appreciates the panel's "thoughtful approach" and said it "(welcomes) a thorough vetting of the issues that fall under the commission's authority."

Opponents rallied this week in Sioux Falls, Rapid City and Pierre against the project. Yankton Sioux tribe elder Sharon Drapeau said in a statement after the commission meeting that the panel's vote was "expected, but the decision is not anything that will deter us from continuing to oppose the Keystone XL project."

South Dakota U.S. Sen Mike Rounds, who was sworn in on Tuesday, is one of the sponsors of the Senate proposal to authorize construction. He said Republicans want more efficient oil transmission and welcomed conversations with the White House about the plan.

White House spokesman Josh Earnest said Tuesday that the legislation shouldn't undermine the review process underway at the State Department or circumvent a pending lawsuit in Nebraska over its route.

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