Nebraska Regulators Approve Keystone Pipeline Route Days After South Dakota Leak, Shutdown

TransCanada received its final required pipeline route approval, winning Nebraska’s permission to build its long-delayed Keystone XL crude oil pipeline across the state... just days after a 5,000 barrel spill in South Dakota shut the pipeline.

The decision will almost certainly be challenged in court.

Just a few short days after 210,000 gallons of crude oil spilled in South Dakota, Bloomberg reports that Nebraska"s Public Service Commission voted three to two Monday, removing one of the last hurdles to the Calgary-based company’s construction of the $8 billion, 1,179-mile conduit (1,897-kilometer), which has been on its drawing boards since 2008.

For those who aren"t familiar with the project, the pipeline links Canada’s Alberta oil sands to U.S. refineries.  While a portion of the pipeline has been operating, part of it had still not been approved by state regulators... until today"s decision by Nebraska.

However, as Bloomberg notes, the commission approved an alternative route.

Jane Kleeb, president of the environmental advocacy group Bold Alliance, said green-lighting an alternative route may have helped the commission reach a "middle ground solution.”

 

At the same time it opens new questions that she said her group would explore in federal court. She argued the secondary route wasn’t adequately vetted.

 

That view mirrored a dissenting opinion filed by Commissioner Crystal Rhoades. She wrote that TransCanada didn’t meet "the burden of proof” in proving that the pipeline is in the state’s public interest, and she said the alternative route needed more study on both the state and federal level. For example, she said, Nebraska’s Department of Environmental Quality didn’t analyze the alternative route at all in its 2013 report.

 

"It is clear” TransCanada “never intended it to be considered," Rhoades said.

 

In its post-hearing brief, TransCanada told the panel its "preferred route was the product of literally years of study, analysis and refinement by Keystone, federal agencies and Nebraska agencies," and that no alternate route, even one paralleling the Keystone mainline as the approved path does, was truly comparable.

TransCanada"s share price is up on the news...

Notably, with Nebraska’s go-ahead in hand, TransCanada still must formally decide whether to proceed with construction on the line, which would send crude from Hardisty, Alberta, through Montana and South Dakota to Nebraska, where it will connect to pipelines leading to U.S. Gulf Coast refineries. The company’s open season for gauging producers’ interest closed late last month, and TransCanada executives have indicated that they’ve secured enough shipping commitments to make the project commercially worthwhile.

Keystone XL Pipeline Shut Down After 5,000-Barrel Spill In South Dakota

Well this is awkward.  After months/years of protests targeting the Keystone XL pipeline from environmentalists worried about oil spills, TransCanada has now been forced to shut down the pipeline following...drum roll please...a 5,000 barrel oil spill in South Dakota.  According to The Hill, the pipeline was taken offline at 6am this morning following a leak that was discovered about 35 miles south of a pumping station in Marshall County, South Dakota.

Workers took the Keystone oil pipeline offline on Thursday after it spilled 5,000 barrels of oil in rural South Dakota, officials said.

 

A TransCanada crew shut down the pipeline at 6 a.m. Thursday morning after detecting an oil leak along the line, the company said. The leak was detected along a stretch of the pipeline about 35 miles south of a pumping station in Marshall County, South Dakota.

 

TransCanada estimates the pipeline leaked 5,000 barrels of oil, or about 210,000 gallons, before going offline. The company said it"s working with state regulators and the Pipelines and Hazardous Materials Safety Administration to assess the situation.

 

The South Dakota Department of Environment and Natural Resources heard about the leak at about 10:30 a.m. Thursday, ABC affiliate KSFY reported.

For those who aren"t familiar with the project, the 1,179 mile Keystone XL pipeline links Canada’s Alberta oil sands to U.S. refineries.  While a portion of the pipeline has been operating, part of it has still not been approved by state regulators.

Here is the statement on the incident posted by TransCanada earlier this morning:

At approximately 6 a.m. CST (5 a.m. MST) today, we safely shut down the Keystone pipeline after we detected a pressure drop in our operating system resulting from an oil leak that is under investigation.

 

The estimated volume of the leak is approximately 5,000 barrels. The section of pipe along a right-of-way approximately 35 miles (56 kilometres) south of the Ludden pump station in Marshall County, South Dakota was completely isolated within 15 minutes and emergency response procedures were activated.

 

The safety of the public and environment are our top priorities and we will continue to provide updates as they become available.

As you may recall, former President Barack Obama opposed the completion of the pipeline, but the Trump administration granted a permit for it in March. That said, Nebraska state regulators still need to approve the project in their state and a decision was expected from the Nebraska Public Service Commission next week....somehow we suspect that decision might be delayed.

The five members of the Nebraska Public Service Commission will vote on a proposed order for the Keystone XL pipeline on Nov. 20, the agency announced on Monday, though it didn’t detail what that decision might be.

 

Approval from the Nebraska commission is one of several tasks facing Keystone XL developer TransCanada, which hopes to build the pipeline and deliver oil from Alberta, Canada, to the Gulf of Mexico.

 

TransCanada reapplied for its Nebraska permit in February, putting the decision in the hands of the Public Service Commission. It applied to follow the same route bisecting Nebraska that the state’s governor approved in 2013, before President Obama rejected federal permits for the pipeline.

Ironically, Trump touted the Keystone XL pipeline as "the greatest technology known to man or woman" when he approved it back in March...oops.

Today, I was pleased to announce the official approval of the presidential permit for the #KeystonePipeline. A great day for American jobs! pic.twitter.com/5ga6XmpStG

— Donald J. Trump (@realDonaldTrump) March 24, 2017

Canada Unveils $650 Million Lumber Industry 'Bailout' "To Stand Up To US"

Canada"s Natural Resources Minister Jim Carr just announced C$867 million (around $650 million) in financial supports for softwood lumber producers and the communities where they are based...“Canada is standing up to the U.S., Canada is standing up for Canadians.”

On Wednesday, the Conference Board of Canada released a report saying Canadian softwood producers would pay $1.7 billion in duties a year and cut 2,200 jobs and $700 million in U.S. exports over the next two years before the dispute is settled.

And perhaps on the basis of that report, as Canadian Press reports, the package includes loans and loan guarantees to help cushion the blow for forestry companies and to help them exploring new markets and innovations.

Package includes up to C$605 million in loans and loan guarantees for companies, C$45 million to reach new markets, C$118 million in innovation funding for firms, C$9.5 million funding for those who lose jobs, C$80 million in training, C$10 million for indigenous resource development.

The help includes C$260 million to help diversify the market base for Canadian lumber products, improve the efficiency of indigenous forestry initiatives and extend work-sharing agreement limits to minimize layoffs.

The money also includes measures to support workers who want to upgrade their skills and transition to a different industry.

Cabinet discussed the options for a package last month, but the federal government wanted more input from the provinces via the special working group Carr established in February.

Notably, the government has been careful to characterize the money as a support package, not a bailout, in order to avoid running further afoul of protectionist forces in the United States.

Remember how everyone screamed at Trump that this would send Lumber prices soaring, crush homebuilder margins, send housing costs through the roof? Well...

Trade Wars Begin: Trump Announces 20% Tariff On Canadian Softwood Lumber Imports

Speaking during a first of its kind meeting dedicated only to members of the U.S. conservative media, including Breitbart News, OANN and Daily Caller, President Trump told reporters to expect a 20% tariff on softwood lumber coming into Canada.

“We’re going to be putting a 20 per cent tax on softwood lumber coming in — tariff on softwood coming into the United States from Canada,”  tweeted Charlie Spiering of Breitbart Media.

Trey Yingst of OANN tweeted that according to Trump “Canada has treated us very unfairly” and also threatened a tax on Canada’s dairy industry.

According to the WSJ, Wilbur Ross said the tariff will be applied retroactively and imposed on Canadian exports to the U.S. of about $5 billion a year. He said the dispute centers on Canadian provinces that have been allegedly allowing loggers to cut down trees at reduced rates and sell them at low prices. "The determination that Canada improperly subsidizes its exports is preliminary, and the Commerce Department will need to make a final decision. In addition, the U.S. International Trade Commission will need to find that the U.S. industry has suffered injury. But even a preliminary decision has immediate real-world consequences, by discouraging importers from buying lumber from Canada."

Or, as a WSJ associate editor put it, "Blame the Chinese, but tax the Canadians:"

Blame the Chinese, but tax the Canadians:
"Trump to impose 20% tariff on imports of Canadian softwood lumber" https://t.co/BDjZ8qFFNx @WSJ

— John Bussey (@johncbussey) April 24, 2017

“We tried to negotiate a settlement but we were unable,” Mr. Ross said, adding that previous administrations have also been unsuccessful in resolving the dispute.

Speaking to the FT, Wilbur Ross said that the US would impose tariffs ranging from 3 per cent to 24% on five Canadian lumber exporters. The Canadian companies are Canfor, J.D. Irving, Resolute FP Canada, Tolko Marketing and Sales and West Fraser Mills.

“This has been another long-standing dispute with Canada,” said Ross. “These duties will be applied retroactively, 90 days backward, because they were on notice that this was forthcoming and they didn’t change the practice of dumping subsidized lumber.”

Ross also told the FT that the Canadian provinces that own the forests from where softwood lumber is sourced were subsidizing logging activities, which allowed Canada to then dump the lumber in the US at below-market prices.

“It is around $5bn a year worth of lumber that comes in this way. And the Canadians have roughly a 31.5 per cent market share of the whole US softwood lumber (market),” Mr Ross added.

The Trump administration had already notified Canada of its intent to impose the tariffs, a measure which comes as Trump approaches his 100th day in office on Saturday and is another example of his intent to take a more protectionist approach to trade policy.

The tariffs have been anticipated since last week when Trump launched a barrage of criticism against Canada’s dairy, energy and lumber sectors. As Global News adds, the expected announcement from the U.S. Commerce Department on countervailing duties, a type of import tax meant to counter a subsidized export, is just the latest in the ongoing Canada-U.S. softwood row, which stretches back to the 1980s.

Previously, President Trump said the Canadian system of protectionist dairy quotas is harming U.S. farmers, and that he’ll press Canada for changes to its dairy system as part of North American Free Trade Agreement talks.

Last week, Prime Minister Justin Trudeau said the U.S. has a $400m dairy surplus with Canada adding “it’s not Canada that’s the challenge here.”

The dispute largely stems from the fact most Canadian lumber is harvested on government-owned land while American lumber comes mainly from private land. The American lumber lobby has long accused Canadian governments of allowing companies to cut wood for less than market prices, which they say is an unfair subsidy.

The announcement is also the latest escalation in US trade wars under the new administration, and comes just hours after China warned it would retaliate if the US imposed tariffs on its steel imports.

In separate comments, Breitbart"s Charlie Spireling reports that when asked about Assad’s existing stockpile of chemical weapons, Trump responded “Wait and see if he uses them again, OK?"

Trump also discussed the North Korean situations, and said  “this should have been done by Obama and it should have been don by every president since, really, Clinton.” Asked about Kim Jong-un’s military capacity, Trump replies: “I’m not so sure he’s so strong like he says he is, I’m not so sure at all.”

There was immediate selling in the Loonie.

Which just broke to the weakest in 4 months against the US dollar.

And with lumber prices already at 13-year highs, one can only imagine what this will do to the price of houses in America.

Canadians have had a tough time of it recently: they are getting inundated with illegal immigrants (thanks to Trudeau"s welcome) and not benefitting from the wholesale emigration north that so many liberals promised if Trump was elected; housing has become unaffordable due to Chinese hot money flows encouraged by the government; the Canadian energy industry is hosed because of US shale production-driven low prices; and now the US imposes trade tariffs on another of their biggest exports.

Here Is The List Of Donald Trump's "Priority" Infrastructure Projects

With the topic of infrastructure investing dominating today"s newsflow after the NYT report that Democrats would support Trump if he endorsed their propsed list of some $1 trillion in infrastructure projects, which would create as many as 15 million jobs, the Kansas City Star and The News Tribune have compiled a presentation - based on internal White House documents - of about 50 infrastructure projects nationwide which comprise the "priority list" for US infrastructure projects in the coming years.

As McClatchy reports, the documents, circulated within the congressional and business communities, offer a first glimpse at which projects around the country might get funding if Trump follows through on his campaign promise to renew America’s crumbling highways, airports, dams and bridges.

Among the potential projects are a new terminal for the Kansas City airport, upgrades to Interstate 95 in North Carolina and the construction of a high-speed railway from Dallas to Houston. The document obtained by the Star proposes funding the projects as public-private partnerships, with half the money coming from private investment.

The priority list of “Emergency & National Security Projects" was put together by the Trump team, a senior congressional aide told Kansas City Star. It includes cost estimates and job impact numbers. According to the source, it is not clear whether that document is a draft or a final version.

The National Governors Association circulated a similar list as a spreadsheet among state officials in December, requesting further suggestions. All but two projects on both lists are the same. Some projects that governors suggested — in California and Washington state in particular — do not yet appear on either list. The governors’ association has received 43 responses from states and territories so far, said Elena Waskey, a spokeswoman for the association.

“The total number of projects is more than 300,” Waskey said. “We are working to convene information for as many states as possible that we will then forward to the administration.” The White House did not respond to a request for comment.

Among the projects listed is a $10 billion proposal to replace the nation’s radar-based air traffic control system with one called NextGen, based on satellites. The document projects the project could create 2,300 direct jobs.

For those concerned about partisan bias among the proposed projects, here are some stats: in some states, such as Missouri, more than one project is listed, while others states appear to have come up empty. Neither document lists any projects in Kansas, for example. The National Governors Association asked governors’ offices last month for input on a preliminary list of infrastructure projects compiled by the Trump team, said Jaime Smith, a spokeswoman for Washington’s Democratic Gov. Jay Inslee.

“They seek examples of priority infrastructure projects that might be incorporated into a future infrastructure investment program,” said the letter from the governors’ association, dated Dec. 16. “Specifically, the transition team is looking for 3 to 5 project suggestions from each state that they would vet for inclusion in a new program.” The letter said the vetting would be done by a bipartisan infrastructure commission overseeing investments.

“The initial spend on these projects for 2017 is expected to be $150 billion, and the transition team hopes that this type of project will be continued over the next 2 years,” according to the letter. The letter also noted that any contributions governors made would not be binding, and that this was “just an initial information-gathering request.”

Once the Trump administration officially took office, the letter said, “there will be a more formal process for states to submit information. Projects will be chosen through a more formal process as well.” The projects have to meet specific criteria:

•  A national security or public safety “emergency.”


• “Shovel-ready,” with at least 30 percent of initial design and engineering work complete.


• Direct job creator.


• Project with the potential for increased U.S. manufacturing.

The governors’ association letter included a list of projects already being vetted, with the request that governors use it as a model for submissions.

The summary list of 50 proposed projects is below:

California"s Democratic governor Jerry Brown’s office sent nine examples of big shovel-ready projects in California, including the Sacramento River Bank Protection Project and Bay Area Commuter and Freight Projects. That preliminary list appears to be similar to the document obtained by McClatchy’s Star, with two differences: The preliminary list includes the Alaska Pipeline & LNG Project instead of the Texas Central Railway and it lists the Fort Mojave Solar Project instead of the Howard Street Tunnel.

Both the preliminary list and the more detailed document obtained by the Star include a new terminal for Kansas City International Airport. The detailed document says the project would cost $972 million and generate 1,000 jobs.  The Kansas City airport is one of three airport projects on the Trump team’s document. The others are expansions of the Lambert-St. Louis International Airport and the Seattle-Tacoma International Airport.

“The business case for a new terminal was bolstered after Southwest and the other airlines told the City Council on April 26 that they would finance the nearly $1 billion new terminal, to be built where Terminal A is now,” reads the document’s description for KCI, which lifts word-for-word a passage in a June 24 article in The Star. In North Carolina, the I-95 project would provide urgent improvements to one of the oldest sections of the busiest interstate in the nation, according to the document. The cost is listed at $1.5 billion, and the project would produce an estimated 5,400 jobs, the document says.

The 250-mile high-speed railway in Texas would enable commuters to travel between Houston and Dallas/Fort Worth in less than 90 minutes, according to the document. It is a $12 billion proposal that would create 40,000 direct jobs, the document says.

Other proposals include I-395 reconstruction in Florida and a Cadiz Valley Water Conservation, Recovery and Storage Project designed to conserve billions of gallons of renewable groundwater in California’s Mojave Desert.

The full presentation of 50 proposed projects is below (link)