South Dakota lawmakers approve termination of Keystone XL pipeline loan

The South Dakota Legislature’s executive board has approved the termination of the surety bond for the Keystone XL pipeline.

TransCanada Keystone Pipeline paid a principal amount of $20 million in July 2020 for a surety bond to the state while the project was ongoing. The money was put up as security for costs South Dakota might have incurred from protests related to the project, according to executive board members.

“The surety bond posted with the Department of Revenue renews July 6, 2022, requiring the company to pay a substantial sum as a bond premium,” attorneys for Keystone wrote in a letter requesting termination of the bond. “The project having been terminated, reclamation of disturbed areas and disposition of material having been accomplished, there is no purpose for the security bond to remain in effect.”

Work on the Keystone XL pipeline ended in 2021 after President Joe Biden revoked the permit, which had allowed the company to construct and operate a pipeline across the international border between the U.S. and Canada. The revocation was a reversal of former President Donald Trump’s previous permit authorization in March 2019. Thousands of workers subsequently lost their jobs.

Earlier this year, 16 Republican attorney generals called on Biden to reinstate the permit for the Keystone XL pipeline. In a letter, they warned Americans would be left paying higher gas prices and urged for a focus on domestic energy production.

On Friday, the national average for gas was $4.70 per gallon, AAA reported. In California, the average was above $6 per gallon.

TC Energy, the parent company of Keystone, officially terminated the Keystone XL project in June 2021.

“Since the project was terminated, Keystone has ended all construction-related activity on the Keystone XL project in South Dakota, completed all road reclamation work required by its haul road agreements with counties and townships, sold all of the pipe stored in pipe yards in South Dakota, disassembled the pipe yards save one, reclaimed all areas disturbed by construction, disassembled and disposed of the work camps that were constructed in support of construction activities, and sold the pump stations that were constructed in Haakon, Jones and Tripp counties,” Keystone attorneys said.

The company said it has no expectation that the remaining Keystone XL pipeline “wind-up activities” will create a cause for the state of South Dakota to access the surety bond.

The Public Utilities Commission accepted the final quarterly report from the company in December and terminated further reporting requirements. Keystone attorneys said there are no outstanding, contested, or unpaid claims against Keystone or the bond.