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Choosing an alternative route for the Keystone XL pipeline will cost TransCanada Corp. time, money, and could send it through other environmentally sensitive areas, industry analysts say.
But it’s also the best chance that the Calgary-based company has to move forward on the massive $7-billion project. With a new route, some previous critics have melted away.
Nebraska Governor Dave Heineman, who had been an opponent, said he has asked the Obama administration to move quickly to push the project forward.
“Our most important objective all along was to move the route. So if we can expedite the supplemental environmental impact assessment and get moving on the construction of the pipeline, we’re all for that,” he said in a press conference in Nebraska Tuesday.
He wants the Department of State, which has to approve Keystone XL because it crosses the border between Canada and the United States, to do the same.
Meanwhile, U.S. environmental groups say they will continue their fight to prevent the 2,700-kilometre pipeline from ever being built.
TransCanada did an about-face Monday and announced it would re-route its controversial Keystone pipeline project, first announced in July, 2008.
The move came just days after the U.S. State Department deferred a decision on the pipeline to consider alternative routes. That delayed a final decision until after the 2012 presidential election.
The controversial project, if built, would deliver 700,000 barrels a day of crude from Alberta’s oil sands to refineries in Texas.
There are currently several alternative routes on the table, analysts say.
One, known as the I-90 Corridor, would take the pipeline down through South Dakota. It would cost an additional $473 million and run 114 km longer. But this route would also cross the Missouri River twice more than the original proposal, and presents “significant technical challenges,” analyst Steven Paget of FirstEnergy Capital Corp. wrote in a research report after the delay was announced last week.
Another route, dubbed the Northern Border route, would make the overall pipeline 166 km longer.
“Both of these routes have significant challenges of their own, cross other environmentally sensitive areas, and would certainly cost more money,” Paget wrote in his report.
Paget believes rerouting will delay the pipeline by another 18 months.
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