The developer of the Keystone XL oil pipeline in Montana will begin work in the fall before starting full construction in 2019, according to a report Thursday.
The State Department recently sent a letter to Native American tribes, obtained by Reuters, notifying them of upcoming work by TransCanada as part of government consultation to minimize harm to their land in northeast Montana.
The $8 billion Keystone XL pipeline would ship oil from Canada’s Alberta oil sands to Steele City, Neb., and then on to refineries along the Gulf Coast. But it has been challenged by environmental advocates worried about spills and climate change.
Former President Barack Obama’s State Department considered the application for seven years before Obama rejected it in November 2015, a month before signing the Paris climate change agreement.
The Trump administration granted a permit for the pipeline in March, but it still needed approval by the Nebraska Public Service Commission to be built in the state.
Nebraska regulators in November approved an in-state permit for Keystone XL, the last major regulatory hurdle facing the project, but they rejected TransCanada’s preferred route, approving an alternative that would move the pipeline further east.
The original section of the Keystone pipeline system opened in 2010. Keystone XL would be an addition of 1,179 miles to the existing 2,687-mile network.
TransCanada has not officially made a decision on whether to commit to investing in the project, as it debates whether it’s still economically viable for the company after years of delays.
Oil prices surpassed $130 a barrel when TransCanada first sought a cross-border permit for the pipeline in 2008. But oil prices have been trading for less than half that for the last several years, as an oil glut caused prices to plunge.
Exxon Mobil, ConocoPhillips, and other major energy companies have pulled out of the Canadian oil sands to focus on shale development in Texas.
When asked about the State Department letter on Thursday, TransCanada told Reuters: “We are progressing towards a final investment decision. We expect construction to begin in 2019 and we are doing the necessary work to prepare for those activities.”
