South Dakota regulatory commission begins hearing on Keystone XL crude oil pipeline

A crude oil pipeline that TransCanada Keystone wants to build across western South Dakota would face medical, housing and supply challenges because the areas it would run through are remote and sparsely populated, a company official said Monday.

The state Public Utilities Commission began a formal hearing on TransCanada Keystone's application for a permit to build the 313-mile Keystone XL pipeline, part of a project to deliver crude oil from the Alberta tar sands to Gulf Coast terminals and refineries in Texas.

Access to medical facilities during construction is "probably our No. 1 challenge on this project" because the route is so remote, said Steve Hicks, construction manager for the part of the pipeline that would run from the Canadian border through Montana, South Dakota and Nebraska.

Each construction camp can treat minor injuries, but will cooperate with local emergency medical agencies for more serious injuries, Hicks said.

Operating in sparsely populated areas also will present challenges in getting supplies and providing housing to construction workers, he said.

TransCanada's witnesses offered prefiled written testimony and answered questions from the PUC's staff, the elected commissioners and a lawyer representing landowners along the route. The hearing is expected to last several days but the commission is not expected to issue a decision until spring.

The pipeline would enter South Dakota from Montana in Harding County and cross Butte, Perkins, Meade, Pennington, Haakon, Jones, Lyman and Tripp counties before entering Nebraska. That portion is estimated to cost $920 million. The company wants to begin construction in 2011.

Keystone XL would deliver up to 900,000 barrels of crude oil a day through a 36-inch pipe running from near Hardisty, Alberta, to Texas terminals near Port Arthur and Houston.

TransCanada already is building a pipeline through eastern South Dakota to deliver Canadian crude oil to refineries in Illinois and Oklahoma.

Dakota Rural Action represents landowners along the route. Its lawyer, Paul Blackburn, said the organization will present no witnesses during the PUC hearing because it has no money to hire experts.

In addition, the state PUC has little authority over some of the safety issues, such as potential leaks, that are crucial to landowners, Blackburn said.

"The landowners are largely concerned about safety issues. Those are mostly subject to federal regulation, not state regulation," Blackburn said.

Under state law, the PUC will decide whether to approve construction along the proposed route based on whether the project would comply with all applicable laws and rules, would not pose a serious threat to the environment, would not harm the health and safety of the region, and would not interfere with area economic development.

Opening witnesses said pumping stations along the pipeline will be kept as far as possible from houses. Steps also will be taken to prevent it from running through burial grounds or sites containing dinosaur fossils, they said.