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South Dakota Public Utilities Commission
Frequently Asked Questions about the proposed TransCanada Keystone Pipelines

October 31, 2014

This document primarily addresses questions about the proposed Keystone XL crude oil pipeline project in western South Dakota. It also answers some common queries about the Keystone Pipeline that is in operation in eastern South Dakota.

GENERAL

What information is available from the PUC about the first Keystone Pipeline that was constructed in South Dakota?
TransCanada filed an application with the PUC on April 27, 2007, to construct the Keystone Pipeline in eastern South Dakota. The PUC approved a construction permit with 57 conditions on March 11, 2008. The final order was issued on April 25, 2008. The pipeline, which is in operation, extends across portions of Marshall, Day, Clark, Beadle, Kingsbury, Miner, Hanson, McCook, Hutchinson and Yankton counties in South Dakota. The full docket, HP07-001, is accessible from the PUC's website.

What is the length of the Keystone XL Pipeline and what counties is it proposed to cross?
Keystone XL is proposed to stretch 1,980 miles, from Alberta, Canada, to the U.S. Gulf Coast in Texas. The South Dakota portion of the project will be approximately 314 miles and will extend from Montana to Nebraska, crossing the South Dakota counties of Harding, Butte, Perkins, Meade, Pennington, Haakon, Jones, Lyman and Tripp.

PUC INVOLVEMENT

What is the role of the PUC in the construction of the Keystone XL crude oil pipeline?
The South Dakota Energy Conversion and Transmission Facilities Act gives the PUC authority to grant, deny, or grant with conditions a permit to construct the crude oil pipeline in South Dakota. See SDCL Chapter 49-41B and ARSD 20:10:22

Has the PUC granted the construction permit for the Keystone XL Pipeline?
The commission granted the construction permit for the Keystone XL Pipeline on March 12, 2010, with 50 conditions. Parties to the docket requested certain conditions be reconsidered, and as such, the commission approved an amended final decision and order on June 29, 2010. The conditions can be found as Exhibit A (2,212 KB) beginning on page 25 of the Amended Final Order.

TransCanada has applied to the U.S. Department of State for a Presidential Permit authorizing the construction, operation and maintenance of its proposed Keystone XL Pipeline project.

What is the status of the construction permit issued by the PUC for the Keystone XL Pipeline in June 2010?
Because TransCanada did not begin construction on the Keystone XL Pipeline in South Dakota within four years of the permit being issued, they must certify to the PUC that the facility continues to meet the conditions upon which the permit was granted. TransCanada filed a certification docket with the PUC in September 2014.

What is the process the commission goes through when considering a certification request?
As with any new docket filing, the company's request will be posted online in an electronic docket and an intervention deadline will be set. All documents filed in the case will be posted in the online docket, including written comments submitted to the commission. The commission will review the request in accordance with applicable South Dakota laws and administrative rules. Official proceedings, such as commission meetings and hearings, will be noticed and open to the public.

What avenues are available for public involvement in the Keystone XL Pipeline construction certification docket?
Parties that wish to actively participate in the case through legal motions, discovery, the written preparation and presentation of actual evidence may apply for intervenor status. Intervenors are legally obligated to respond to discovery from other parties and to submit to cross-examination at a formal hearing. Others wishing to offer comment on the certification request may submit written comment to the commission via email to puc@state.sd.us or by U.S. mail to PUC, 500 E. Capitol Ave., Pierre, SD 57501. These informal comments will be posted in the HP14-001 docket.

What is the PUC's authority relative to the decision to grant or deny Keystone XL's construction permit?
State law provides the PUC's responsibility to determine whether to grant, deny, or grant with terms, conditions or modifications a permit for the construction of a transmission facility, such as the Keystone XL crude oil pipeline proposed by TransCanada. The PUC does not have authority over the actual route of the pipeline. A permit to construct a pipeline may be granted if the PUC determines the pipeline will produce minimal adverse effects on the environment and the citizens of South Dakota. State law further describes that the applicant, Keystone XL, must prove the project will comply with laws and rules; pose no threat of serious injury to the environment and current or future inhabitants; not substantially impair the health, safety or welfare of inhabitants; and not interfere with the orderly development of the region. See SDCL 49-41B-22 for the details of these four elements of proof the applicant must meet.

What is the PUC's authority relative to the decision to accept or deny Keystone XL's construction permit certification?
TransCanada must certify to the PUC that the Keystone XL Pipeline continues to meet the conditions upon which the permit was granted by the PUC in June 2010. The conditions can be found as Exhibit A (2,212 KB) beginning on page 25 of the Amended Final Order in HP09-001. State law provides the PUC's responsibility to determine whether to accept or deny the certification. See SDCL 49-41B-27

How will local roads be affected by the Keystone XL project?
As a condition of the permit granted by the PUC in June 2010 all roads impacted by construction of the pipeline are required to be repaired to the condition they were in before construction, taking into account normal wear and tear. An indemnity bond is held to ensure this is completed; otherwise counties can call on the bond to fulfill this work. Details of the bonding requirement for Keystone XL can be found under Condition 23 (2,212 KB) on page 32 of the PUC order in HP09-001.

What about the land that is displaced by the construction?
The permit issued in June 2010 for the construction of the Keystone XL Pipeline addresses construction and reclamation in Condition 16 (2,212 KB) on page 28 of the PUC order. After construction is completed, the land is to be returned to pre-construction condition, including separating soil types, re-seeding prior crops or vegetation, and undertaking erosion control measures.

What is the role of the PUC in monitoring the operation, maintenance and safety of the pipelines during operation?
The PUC's authority over the Keystone and Keystone XL Pipelines is limited to the issuance or denial of a permit to construct the pipeline in South Dakota. Much of the activities surrounding the pipeline that occur during the construction, operation and maintenance of the pipeline are under the jurisdiction of other state and federal agencies.

LEAKS

If a leak occurs after the Keystone and Keystone XL Pipelines are in operation, what is the responsibility of the landowner who signed the easement with the company?
Landowners should direct questions about easements and protections to their own attorneys. South Dakota law provides that owners and operators of pipelines are responsible for remediating contamination caused by pipeline leaks and compensating those damaged, with liability also potentially lying with persons whose actions caused the leak (such as those striking the line with construction equipment). See SDCL Chapter 34A-12 and Conditions 48 and 49 (2,212 KB) on page 38 of the PUC order for the Keystone XL Pipeline and Conditions 56 and 57 (1,636 KB) on page 15 of the order for the Keystone Pipeline.

What protection does the PUC provide to South Dakotans, particularly landowners and owners of other infrastructure, if the Keystone Pipelines experience a leak?
Some of the conditions the PUC placed upon the permit for the first Keystone Pipeline (approved in April 2008) and for Keystone XL (approved on reconsideration in June 2010) address disturbed or damaged property and TransCanada's responsibility to repair or pay for certain damages. Additionally, a damaged landowner could seek recourse outside the PUC for any damages to private property that result. All property rights and recourses located in South Dakota Codified Law are applicable in this situation.

If a leak occurs on a Keystone Pipeline that contaminates an aquifer in South Dakota, what authority does the PUC have over TransCanada?
The PUC's authority over the Keystone Pipeline is limited to the issuance or denial of a permit to construct the pipeline in South Dakota. Much of the activities surrounding the pipeline that occur during the construction, operation and maintenance of the pipeline are under the jurisdiction of other state and federal agencies. The South Dakota Department of Environment and Natural Resources (DENR) has jurisdiction over contamination of ground water resources in South Dakota, including contamination caused by a pipeline. Certain aquifer contamination is also under the jurisdiction of the federal Environmental Protection Agency and/or the Coast Guard.

How much is the average leak?
Evidence in the Keystone XL hearing stated if a spill were to occur on the Keystone XL pipeline, federal Pipeline and Hazardous Materials Safety Administration (PHMSA) data indicate the spill is likely to be three barrels or less. According to DENR records, four spills have occurred along the first Keystone pipeline in South Dakota. All have occurred at Keystone pumping stations, and were contained and cleaned up on-site. Only Keystone property was affected. The average spill amount was approximately 30 gallons. However, three spills were ten gallons or less. The third was larger; approximately 100 gallons of crude oil were released over an area of 60 feet by 110 feet. All spills were contained on site and all affected soil and water was removed. Each spill was cleaned up at TransCanada's expense according to DENR requirements.

How long until a leak can be detected?
The time required for detection of a leak varies according to the size of the leak and other factors such as location. Keystone will operate the XL Pipeline using a state of the art Supervisory Control and Data Acquisition system with 24/7 monitoring of the SCADA leak detection systems. Keystone will also be required to do fly over visual inspections and other on-the-ground visual inspections on a regular basis in accordance with federal regulations and the permit conditions. Testimony (1,066 KB) from the first Keystone pipeline proceedings describes the leak detection systems in more detail.

Additionally, all interstate pipelines are subject to federal (PHMSA) regulation. As such, the PUC ordered all required plans, programs, and procedures be prepared and filed by TransCanada with PHMSA before the pipeline was able to be in operation.