SD commission approves Keystone XL oil pipeline

Associated Press, Pierre, South Dakota, Feb. 18, 2010— A state commission voted unanimously Thursday to approve a construction permit for the crude oil pipeline TransCanada Keystone wants to build across western South Dakota.

After setting conditions requiring the company to protect the environment and reimburse landowners for any damage caused by the project, the three-member Public Utilities Commission approved the portion of the Keystone XL pipeline that would run about 313 miles through South Dakota.

In public hearings in November, landowners along the route said they were worried about oil spills and damage to their land, water and roads. PUC Chairman Dusty Johnson said the commission, its staff and representatives of landowners have done much to add language to the permit to protect landowners.

Spills from oil pipelines are rare, and the average spill across the nation in recent years has been about three barrels, Johnson said. Emergency response crews can respond to spills and other problems quickly, he said.

"When you put that all together, you realize that this project can be done in a way that is sensitive to the needs of South Dakota, her land and her people," Johnson said.

Paul Seamans of Dakota Rural Action, a nonprofit group that has helped landowners, said he would prefer the project not be built, but he praised the PUC for its work on the construction permit. Landowners are mostly worried about environmental issues that will be handled in pending federal permits, he said.

The proposed pipeline would deliver up to 900,000 barrels of crude oil each day from tar sands near Hardisty, Alberta, to Gulf Coast terminals and refineries in Texas. It would enter South Dakota from Montana in Harding County and run through Butte, Perkins, Meade, Pennington, Haakon, Jones, Lyman and Tripp counties before entering Nebraska.

The South Dakota portion is estimated to cost $920 million, and the company wants to being construction in 2011.

TransCanada is already building another pipeline through eastern South Dakota to deliver Canadian crude oil to refineries in Illinois and Oklahoma.

Some opponents have criticized the PUC for approving the construction permit before a federal environmental study is completed, but commissioners said a state law set a deadline that required them to make their decision now. TransCanada Keystone XL needs a presidential permit from the U.S. State Department, and the state permit approved Thursday requires the company to comply with all requirements of the State Department's environmental impact statement.

The permit conditions approved by the PUC cover 13 pages. They include requirements for a public liaison officer to deal with landowner complaints, the repair of any damage caused to property by construction or operation of the pipeline, and the protection of water supplies.

Commissioner Steve Kolbeck also succeeded in adding a provision that would require a paleontologist to be on site during construction if a landowner requests it in a portion of the route where dinosaur fossils are commonly found. Landowners need protection against the loss of fossils of dinosaurs such as Tyrannosaurus Rex, which can be very valuable, he said.