South Dakota Warns It Could Revoke Keystone Pipeline Permit over Oil Spill

Pipeline builder TransCanada is also getting pushback on the Keystone XL expansion, just approved in Nebraska. Native American tribes say they'll fight it.

South Dakota regulators said they could revoke TransCanada's permit for the 7-year-old Keystone Pipeline if an investigation into a large oil spill discovered last week concludes the company violated its terms.  If that happens, the company would have to correct any issues—in the worst case, even replace part of the pipeline—before oil shipments could resume.

The scrutiny comes as more challenges emerge to the company's recently approved expansion of its pipeline system:  the Keystone XL.

On Nov. 16, TransCanada reported that 210,000 gallons, or 5,000 barrels, of oil had spilled from its existing Keystone Pipeline near Amherst, South Dakota, and that it had shut down the pipeline in response.  It was the third major spill in the region for the pipeline, which began operations in 2010.

"What concerns me personally is the number of leaks that have taken place in a short period of time," Gary Hanson, vice chairman of the South Dakota Public Utilities Commission, said.  "With a pipe as young as it is, this is very disconcerting."

Hanson is one of three commissioners on the South Dakota Public Utilities Commission.  All three have said that any violation of the company's construction and operation permit could result in a temporary suspension or cancellation of the pipeline permit.   The U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) is also investigating the cause of the spill and will have to approve any restart of the pipeline.

Read more at South Dakota Warns It Could Revoke Keystone Pipeline Permit over Oil Spill