TransCanada backs new route to keep Keystone alive – by Shawn McCarthy, Kevin Carmichael and Carrie Tait – (Globe and Mail – November 15, 2011)

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Company agrees to shift pipeline from sensitive Nebraska area

OTTAWA, WASHINGTON AND CALGARY – For the oil sands industry, Plan B for Keystone XL looks a lot like Plan A.

After being handed a major setback by the U.S. move to sideline the $7-billion project until at least 2013, TransCanada Corp. appears to have put the project back on the rails with an agreement with key Nebraskan legislators to re-route the line.

Assuming the deal is passed by the full legislature, TransCanada will work with the state’s Department of Environmental Quality to identify a new route to avoid the environmentally sensitive Sand Hills area.

“It’s our sincere hope that with this agreement, we’ve put everybody in a place where they can support the new pipeline route,” Alex Pourbaix, TransCanada’s president for energy and oil pipelines, said in an interview from Lincoln, Neb..

He said the U.S. State Department has agreed to work with the Nebraska Department of Environmental Quality on a supplemental environmental impact statement that would essentially cover a small section of re-routed pipeline, totalling about 50 kilometres.

Mr. Pourbaix said he is confident the new route can be reviewed within nine months, setting the stage once again for the Obama administration to conclude a national interest determination that considers environmental, economic and national security issues. That timing, however, could leave President Barack Obama facing a heated political battle over the pipeline in the run-up to next November election.

The TransCanada executive said the cost of delay should be “relatively modest,” assuming the parties can agree on a new route. The company has already spent $1.4-billion on securing right-of-ways and stockpiling material needed to complete the pipeline project.

The Calgary company has long resisted call to change the routing to avoid the Ogallala aquifer, a sprawling water table that sits beneath the Sand Hills and elsewhere along the route. Mr. Pourbaix said the company was opposed to a major restructuring of the route, arguing it would set the project back another two to three years and possibly kill it altogether.

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