Nebraska Approves New Route For Keystone XL Pipeline To Avoid Ecologically Sensitive Area

After more than a year of delays, Nebraska has approved a new route for the Keystone XL pipeline that will deliver crude bitumen from the oil sands of Alberta to a key junction at Steele City, Neb.

The route is part of larger pipeline network that will ultimately deliver the Canadian petroleum deposits to refineries in Wood River, Ill., and south through Cushing, Okla., to Port Arthur, Texas, and Houston. The bitumen, a heavy, thick, mud-like substance, will be treated with lighter hydrocarbons like natural gas liquids so it can flow through the pipeline.

While the revised route still requires federal approval and authorization by the Obama administration, the move by Republican Gov. Dave Heinman clears the state hurdle.

TransCanada Corp. (NYSE:TRP) first applied for the permit to build the pipeline in 2008, but it faced opposition from landowners who wanted the pipeline to avoid the economically sensitive Sandhills region, known for its massive sand dunes locked in place by a mixed grass prairie in one of the largest uninterrupted expanses of grassland in the country.

As a result of the opposition, TransCanada developed an alternative route last year east of the Sandhills. The governor’s approval comes after the state’s Department of Environmental Quality determined the new route was acceptable. The federal government had rejected the original route because a congressional mandated deadline did not provide enough time to assess the concerns raised in the state over the pipeline.

The new route will also need to be authorized by the State Department, which is engaged it in its own audit of the new route.