SD Regulators Begin Work On Oil Pipeline Permit

The commission will schedule a formal hearing in the case later.

Based on the hearing in the first pipeline, issues in the Keystone XL case likely will include worries by farmers and ranchers about the pipeline's impact on their land, the chance of leaks, and the threat to underground water supplies.

TransCanada's 220-mile pipeline through eastern South Dakota is part of a project to deliver Canadian crude oil to refineries in Illinois and Oklahoma.

The proposed Keystone XL project would deliver up to 900,000 barrels of crude oil a day through a 36-inch pipeline running from near Hardisty, Alberta, to existing Texas terminals near Port Arthur and Houston.

The pipeline would enter South Dakota from Montana in Harding County and then run through Butte, Perkins, Meade, Pennington, Haakon, Jones, Lyman and Tripp counties before entering Nebraska.

The South Dakota portion is estimated to cost $920 million. The company wants to begin construction in 2011 and have the pipeline operating by 2012.

Had the project been operational in January 2008, it would have paid about $10.3 million in property taxes in nine counties and 13 school districts crossed by the pipeline, according to TransCanada Keystone's application.