The cost of building the South Dakota portion of TransCanada Corp’s Keystone XL pipeline has more than doubled to nearly $2 billion over the four years the project has awaited federal approval, the company said in a filing to the state's Public Utilities Commission on Monday.
The project to build nearly 1,200 miles of pipeline to pump 830,000 barrels a day of heavy Canadian oil to the Gulf Coast has awaited approval by the U.S. government for six years and faced strong environmental opposition.
The extended regulatory process, as well as inflation, currency changes and higher costs of labor and storing materials have driven up the cost from the 2010 estimate of $921 million, TransCanada spokesman Shawn Howard told reporters.
South Dakota is the first state where the company has revised its cost estimates, and the latest total for the Keystone XL is $5.4 billion, though TransCanada has said that will be revised higher if and when regulators let them build, due to the regulatory delays. The South Dakota portion stretches 314 miles from Montana to Nebraska.
In addition to federal approval, TransCanada is waiting for Nebraska’s Supreme Court to rule by early next year on whether the state’s governor had authority to approve Keystone XL’s route through the state.