Disputed Canada-US oil pipeline work to start in April

South Dakota News

FILE – This Nov. 3, 2015 file photo shows the Keystone Steele City pumping station, into which the planned Keystone XL pipeline is to connect to, in Steele City, Neb. Pipeline sponsor TC Energy says it has started preliminary work along its route through the U.S. as opponents wait for a judge to rule on their request to block the project. (AP Photo/Nati Harnik, File)

BILLINGS, Mont. (AP) — A Canadian company said Tuesday it plans to start construction of the disputed Keystone XL oil sands pipeline through the U.S. Midwest in April, after lining up customers and money for a proposal that is bitterly opposed by environmentalists and some American Indian tribes.

Construction would begin at the pipeline’s border crossing in Montana, said TC Energy spokesman Terry Cunha. That would be a milestone for a project first proposed in 2008.

The announcement came after the company secured $1.1 billion in financing from the Canadian provincial government of Alberta to cover construction through 2020 and agreements for the transport of 575,000 barrels of oil daily.

Despite plunging oil prices in recent weeks, Alberta Premiere Jason Kenney said the province’s resource-dependent economy could not afford for Keystone XL to be delayed until after the coronavirus pandemic and a global economic downturn have passed.

“This investment in Keystone XL is a bold move to re-take control of our province’s economic destiny and put it firmly back in the hands of the owners of our natural resources, the people of Alberta,” Kenney said.

The pipeline was rejected twice by the administration of President Barack Obama over worries it could make climate change worse. President Donald Trump has been a strong proponent of the $8 billion project and issued it a permit that environmentalists say was illegal.

A court hearing in the permit dispute is set for April 16 before U.S. District Judge Brian Morris in Great Falls. Morris has previously ruled against the project.

The company has previously said it also plans in April to begin work on camps where pipeline construction workers would live in Fallon County, Montana and Haakon County, South Dakota.

The company said the 1,200-mile (1,930-kilometer) pipeline would start sending oil to the U.S. in 2023. It’s designed to move up to 830,000 barrels (35 million gallons) of crude daily at from the oil sand fields of western Canada to Steele City, Nebraska, where it would connect to other pipelines that feed oil refineries on the U.S. Gulf Coast.

Opponents in January asked Morris to block any work. They said clearing and tree felling along the route would destroy bird and wildlife habitat. Native American tribes along the pipeline route have said that the pipeline could break and spill oil into waterways like Montana’s Missouri River.

The judge in December had initially denied a request from environmentalists to block construction because no work was immediately planned.

TC Energy has filed status reports with the judge about its intentions to start work.

“At this time, we are continuing with our planned activities and will adjust if it becomes necessary,” Cunha said.

The remaining $6.9 billion in construction costs is expected to be funded through a $4.2 billion loan guaranteed by the Alberta government and a $2.7 billion investment by TC Energy.

Once the project is complete, TC Energy expects to buy back the Alberta government’s investment and refinance the $4.2 billion loan.

“We thank U.S. President Donald Trump and Alberta Premier Jason Kenney as well as many government officials across North America for their advocacy without which, individually and collectively, this project could not have advanced,” TC Energy chief executive Russ Girling said in a statement.

A representative of the Sierra Club said the decision to push forward with the project amid the coronavirus pandemic was “a shameful new low” for the company. Pipeline opponents contend workers could inadvertently spread the virus to rural areas with limited health care services.

“By barreling forward with construction during a global pandemic, TC Energy is putting already vulnerable communities at even greater risk,” said the Sierra Club’s Catherine Collentine. “We will continue to fight to ensure this dangerous pipeline is never completed.”

Opposition to another pipeline built through the region several years ago, the Dakota Access Pipeline, culminated in months of protests, sometimes violent, near the Standing Rock Sioux Reservation that straddles the North Dakota-South Dakota state line.

Lawmakers in some states have sought to curb the possibility of similar protests against Keystone XL.

South Dakota Gov. Kristi Noem successfully pushed a legislative measure to revive the state’s criminal and civil penalties for rioting and inciting a riot, drawing demonstrations from groups opposed to the pipeline. The law she signed last week enacts criminal and civil penalties for people who “urge” force or violence.

Noem said she spoke with TC Energy on Monday and did not expect construction to begin in South Dakota until the summer.

Another oil pipeline in TC Energy’s Keystone network in October spilled an estimated 383,000 gallons (1.4 million liters) of oil in eastern North Dakota.

Critics have said a damaging spill from Keystone XL is inevitable given the length of the line and the many rivers and other waterways it would cross beneath.

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Associated Press writers Stephen Groves contributed from Sioux Falls, South Dakota and Rob Gillies from Toronto.

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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