Keystone Pipeline

The Keystone Pipeline System is an oil pipeline system in Canada and the United States, commissioned in 2010 by TransCanada (later TC Energy). It is owned by South Bow, since TC Energy's spin off of its liquids business into a separate publicly traded company, effective October 1, 2024. It runs from the Western Canadian Sedimentary Basin in Alberta to refineries in Illinois and Texas, and also to oil tank farms and an oil pipeline distribution center in Cushing, Oklahoma.

TransCanada Keystone Pipeline GP Ltd, abbreviated here as Keystone, operates four phases of the project. In 2013, the first two phases had the capacity to deliver up to 590,000 barrels (94,000 m³) per day of oil into the Midwest refineries. Phase III has capacity to deliver up to 700,000 barrels (110,000 m³) per day to the Texas refineries. By comparison, production of petroleum in the United States averaged 9.4 million barrels (1.5 million cubic meters) per day in first-half 2015, with gross exports of 500,000 barrels (79,000 m³) per day through July 2015.

A proposed fourth pipeline, called Keystone XL Pipeline (sometimes abbreviated KXL, with XL standing for "export limited"), would have connected the Phase I-pipeline terminals in Hardisty, Alberta, and Steele City, Nebraska, by a shorter route and a larger-diameter pipe. It would have run through Baker, Montana, where American-produced light crude oil from the Williston Basin (Bakken formation) of Montana and North Dakota would have been added to the Keystone's throughput of synthetic crude oil (syncrude) and diluted bitumen (dilbit) from the oil sands of Canada. It is unclear how much of the oil transported through the pipeline would have reached American consumers instead of being exported to other countries, as most of it would have been refined along the Gulf Coast.

The pipeline became well known when the proposed KXL extension attracted opposition from environmentalists with concerns about climate change and fossil fuels. In 2015, KXL was temporarily delayed by President Barack Obama. On January 24, 2017, President Donald Trump took action intended to permit the pipeline's completion. On January 20, 2021, President Joe Biden signed an executive order to revoke the permit that was granted to TC Energy Corporation for the Keystone XL Pipeline (Phase 4). On June 9, 2021, TC Energy abandoned plans for the Keystone XL Pipeline.

Description

The Keystone Pipeline system consisted of the operational Phase I, Phase II, and Phase III, the Gulf Coast Pipeline Project. A fourth, proposed pipeline expansion segment Phase IV, Keystone XL, failed to receive necessary permits from the United States federal government in 2015. Construction of Phase III, from Cushing, Oklahoma, to Nederland, Texas, in the Gulf Coast area, began in August 2012 as an independent economic utility. Phase III was opened on January 22, 2014, completing the pipeline path from Hardisty, Alberta to Nederland, Texas. The Keystone XL Pipeline Project (Phase IV) revised proposal in 2012 consists of a new 36-inch (910 mm) pipeline from Hardisty, Alberta, through Montana and South Dakota to Steele City, Nebraska, to "transport of up to 830,000 barrels per day (132,000 m³/d) of crude oil from the Western Canadian Sedimentary Basin in Alberta, Canada, and from the Williston Basin (Bakken) region in Montana and North Dakota, primarily to refineries in the Gulf Coast area". The Keystone XL pipeline segments were intended to allow American crude oil to enter the XL pipelines at Baker, Montana, on their way to the storage and distribution facilities at Cushing, Oklahoma. Cushing is a major crude oil marketing/refining and pipeline hub.

Operating from 2010 to 2021, the original Keystone Pipeline System is a 3,461-kilometre (2,151 mi) pipeline delivering Canadian crude oil to U.S. Midwest markets and Cushing, Oklahoma. In Canada, the first phase of Keystone involved the conversion of approximately 864 kilometres (537 mi) of existing 36-inch (910 mm) natural gas pipeline in Saskatchewan and Manitoba to crude oil pipeline service. It also included approximately 373 kilometres (232 mi) of new 30-inch-diameter (760 mm) pipeline, 16 pump stations and the Keystone Hardisty Terminal.

The U.S. portion of the Keystone Pipeline included 1,744 kilometres (1,084 mi) of new, 30-inch-diameter (760 mm) pipeline in North Dakota, South Dakota, Nebraska, Kansas, Missouri, and Illinois. The pipeline has a minimum ground cover of 4 feet (1.2 m). It also involved construction of 23 pump stations and delivery facilities at Wood River, Illinois and Patoka, Illinois. In 2011, the second phase of Keystone included a 480-kilometre (298 mi) extension from Steele City, Nebraska, to Cushing, Oklahoma, and 11 new pump stations to increase the capacity of the pipeline from 435,000 to 591,000 barrels (69,200 to 94,000 m³) per day.

Additional phases (III, completed in 2014, and IV, rejected in 2015) have been in construction or discussion since 2011. If completed, the Keystone XL would have added 510,000 barrels (81,000 m³) per day increasing the total capacity up to 1.1 million barrels (170,000 m³) per day. The original Keystone Pipeline cost US$5.2 billion. From January 2018 through December 31, 2019, Keystone XL development costs were $1.5 billion.

History

The project was proposed in 2005 by the Calgary, Alberta-based TransCanada Corporation, and was approved by Canada's National Energy Board in 2007. On September 21, 2007, the National Energy Board of Canada approved the construction of the Canadian section of the pipeline, including converting a portion of TransCanada's Canadian Mainline gas pipeline to crude oil pipeline, on September 21, 2007.

In October 2007, the Communications, Energy and Paperworkers Union of Canada asked the Canadian federal government to block regulatory approvals for the pipeline, with union president Dave Coles stating, "the Keystone pipeline will exclusively serve US markets, create a permanent employment for very few Canadians, reduce our energy security, and hinder investment and job creation in the Canadian energy sector".

On January 22, 2008, ConocoPhillips acquired a 50% stake in the project. On March 17, 2008, during the final year of the Presidency of George W. Bush, the United States Department of State issued a Presidential Permit authorizing the construction, maintenance and operation of facilities at the United States and Canada border. In June 2008, the Keystone XL extension was proposed. Later that year, TransCanada began the process of becoming the sole owner of the pipeline. In 2009 it bought out ConocoPhillips' shares and reverted to being the sole owner. It took TransCanada more than two years to acquire all necessary state and federal permits for the pipeline. Construction took another two years.

In September 2009, the NEB – replaced in 2019 by the Canadian Energy Regulator (CER) – started hearings. The pipeline, from Hardisty, Alberta, Canada, to Patoka, Illinois, United States, became operational in June 2010. Later that year, the South Dakota Public Utilities Commission granted a permit to proceed. and in March 2010, the National Energy Board approved the project.

In June 2010, Keystone Pipeline (Phase I) was completed and was delivering oil from Hardisty, Alberta, over 3,456 kilometres (2,147 mi) to the junction at Steele City, Nebraska, and on to Wood River Refinery in Roxana, Illinois, and Patoka Oil Terminal Hub north of Patoka, Illinois.

On July 21, 2010, the Environmental Protection Agency criticized the State Department's draft environmental impact study for neglecting concerns about oil spill response plans, safety issues and greenhouse gas. In February 2011, the Keystone-Cushing extension (Phase II) was completed running 468 kilometres (291 mi) from Steele City to a tank farm in Cushing, Oklahoma.

On June 3, 2011, Pipeline Hazardous Materials and Safety Administration (PHMSA) issued TransCanada a Corrective Action Order (CAO), for Keystone's May 2011 leaks. On April 2, 2016, PHMSA issued a CAO to TransCanada for a 16,800 US gallons (64 m³) leak in Hutchinson County, South Dakota, and again on April 9. The pipeline restarted at a reduced operating pressure on April 10 after the U.S. regulator approved the companies corrective actions and plan. A 9,700 barrels (1,540 m³) leak occurred in Marshall County, South Dakota in November 2017. This leak occurred early in the morning on November 16, 2017, near Amherst, South Dakota and was contained shortly after detection 35 miles (56 km) south of the Ludden pump station.

On August 26, 2011, the final environmental impact report was released, stating that the pipeline would pose "no significant impacts" to most resources if environmental protection measures are followed, but it would present "significant adverse effects to certain cultural resources".

In September 2011, Cornell ILR Global Labor Institute released the results of the GLI Keystone XL Report, which evaluated the pipeline's impact on employment, the environment, energy independence, the economy, and other critical areas.