NEBRASKA REGULATORS APPROVE KEYSTONE XL PIPELINE

Nebraska officials approved the Keystone XL pipeline, though the future of the long-delayed project remains far from certain, report The Wall Street Journal’s Christopher M. Matthews and Vipal Monga.

“The Nebraska Public Service Commission in a 3-2 vote approved Keystone XL’s route through the state, which would extend and expand the company’s Keystone pipeline network to carry oil 1,700 miles from Alberta in Canada to Steele City, Neb.,” the Journal reports.

TransCanada Corp. first proposed the project in 2008, but opposition from land owners and others in Nebraska over environmental risks helped delay the pipeline for years.

Opponents were reinvigorated last week when the original Keystone pipeline leaked about 5,000 barrels of oil in South Dakota on Thursday.

Still, President Donald Trump revived Keystone XL in March, reversing an Obama administration federal directive to block its construction.

But the pipeline still required approval from Nebraska state regulators that approved a route for the pipeline that wasn’t the one preferred by TransCanada.

But now the project is coming to fruition under very different circumstances.

Oil prices are half what they were in 2008 when they averaged $99.75, compared with $49.98 a barrel so far this year. Analysts question whether there is sufficient demand for the conduit.

TransCanada had struggled earlier this year to line up customers to ship crude oil from Canada’s oil sands to its eventual destination beyond Nebraska, the U.S. Gulf Coast, according to people familiar with the matter.

GROWING GAS GLUT THREATENS WEST TEXAS OIL BOOM

Natural gas is gushing out of West Texas, a byproduct of frenzied drilling for oil. That is a problem for energy producers, who are running out of places to send it all, write Ryan Dezember and Alison Sider.

Pipelines running from the region’s Permian Basin to the Gulf Coast’s chemical plants, cities and export terminals are essentially full. Drillers in the Rockies and Canada already supply markets in the north and west.

There is plenty of room on pipelines running south to Mexico, but there is a catch: The gas distribution infrastructure and power plants there that would buy the fuel haven’t been built yet.

For oil and gas producers, the excess supply could potentially force them to take drastic measures—such as capping wells and curtailing oil drilling—until new pipelines to the Gulf Coast are built and planned power plants come online in Mexico.

“We’re headed into a situation that’s never happened before,” said Rusty Braziel, a former trader who heads consultant RBN Energy LLC. “They’re making money on crude. They need to make sure the lack of gas takeaway capacity doesn’t affect their crude production.

MARKETS

Oil futures held gains Tuesday ahead of the Thanksgiving holiday and a meeting by major oil producers to discuss a possible extension of output cuts.

Brent crude, the global oil benchmark, rose 0.27% to $62.39 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.21% at $56.54 a barrel.