The State Department announced on Friday (15 June) that it will prepare a supplemental environmental impact statement assessing the new route proposed by TransCanada for the northern section of its Keystone XL tar sands pipeline that avoids the environmentally sensitive Sand Hills region of Nebraska, which has been the key issue triggering the agency's past refusal to approve the project' previous route.

The company submitted a new application to the State Department for the northern segment of the pipeline on 4 May after the department twice rejected the Alberta-Houston project, once in November last year and again in January, citing threats to the Sand Hills and Ogallala Aquifer in Nebraska. TransCanada split the embattled crude oil pipeline into two separate projects in February to allow the company to proceed with construction of the southern portion running from the oil hub at Cushing, Oklahoma to the Gulf Coast; that segment does not need a presidential permit from the State Department because it does not cross a US border. The new route for the northern segment runs from the Canadian border in Phillips County, Montana, to a pipeline interconnection at Steele City, Nebraska.

Significance: The State Department said it has signed a memorandum of understanding with the Nebraska Department of Environmental Quality to co-operate in their reviews of the new route. The agency did not suggest a date when the assessment would be complete, but has said it hopes to decide on a permit for Keystone XL by early 2013. House Republicans are pushing legislation that would circumvent the State Department review and provide congressional approval of the project. Notably missing from the agency's notice in the Federal Register on the new environmental review is any mention of greenhouse impacts from Keystone XL. Environmentalists have charged that the State Department's previous review of the project failed to adequately assess greenhouse impacts from increased tar sands production made possible by the pipeline.

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