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TransCanada Corp. and Nebraska agreed Monday to re-route the controversial Keystone XL oil pipeline away from a vast underground water source in the state.
The move is sure to re-ignite the fierce debate over environmental concerns about the 2,700-kilometre pipeline versus the appeal of millions dollars in taxes and thousands of jobs for the stagnant U.S. economy.
The massive pipeline, if built, would deliver 700,000 barrels a day of crude from Alberta’s oil sands to refineries in Texas.
The proposed route would have crossed six states, including Nebraska’s ecologically sensitive Sandhills region and the Ogallala aquifer, which provides water for millions in the area.
“If all of this is about the aquifer, that’s an easy thing to fix. If it’s a signal that there’s deeper-seated issues with oil sands developments that resonate with American voters, we’re about to find out,” said Warren Mabee, an assistant professor at Queen’s University who specializes in geography and environmental policy.
“There’s been a blithe assumption that any oil we can produce will be taken up by our friends south of the border. That may not be as true as we thought.”
Alberta-based TransCanada said Monday it reached an agreement with the Nebraska government to ensure the pipeline doesn’t cross the Sandhills region.
“I can confirm the route will be changed and Nebraskans will play an important role in determining the final route,” Alex Pourbaix, TransCanada’s president of energy and oil pipelines, said in a release.
The company said it will work with the U.S. State Department and Nebraska’s Department of Environmental Quality to define “the best location” for the pipeline.
The change does not come as a surprise. Late last week, the U.S. State Department announced it would delay its decision on Keystone until early 2013 to give TransCanada time to come up with a new route.
“They want to get this done as quickly as possible to try to preserve their commercial interests,” said Andrew Leach, assistant professor with the School of Business at the University of Alberta.
The State Department has final say on Keystone because it would cross an international border.
Environmentalists said they still expect a complete environmental impact assessment on any new proposed route.
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