North Dakota regulators would be acting unfairly by granting the city of Fargo's demand to reopen hearings on the location of an oil pipeline, an executive said, estimating the delay could mean $100 million in extra costs.

The state Public Service Commission will consider next week whether to allow the city to intervene in the Keystone pipeline siting case and present evidence about it. Fargo city officials requested the move weeks after public hearings in the matter ended.

Fargo officials worry that an oil leak from the pipeline could contaminate the Sheyenne River and Lake Ashtabula, which supply the city's drinking water. The North Dakota Water Users Association also requested that the hearings be reopened.

Click here to read the letter of objection.

Click her to read the letter of response.

Robert Jones, a Keystone vice president, said pipeline planners had included extensive safeguards against such pollution worries.

"All the issues raised by the city of Fargo have been fully explored by the commission at the hearing that closed back in September," Jones said Friday in a telephone interview. "Reopening the hearings is simply not fair."

Erik Johnson, the Fargo city attorney, said Keystone hearing notices did not emphasize the pipeline route's closeness to Lake Ashtabula and the Sheyenne River.

"They can criticize Fargo all they want for not seeing that," Johnson said. "But when you look at the notice itself, you be the judge of whether somebody - it would jump to their mind, 'Oh my gosh, this is right next to our significant water source."'

TransCanada Corp., which is based in Calgary, Alberta, is developing the Keystone pipeline to transport Alberta crude oil to Illinois and Oklahoma. As planned, it will be able to ship 435,000 barrels of oil daily.

Company officials want to finish the North Dakota section of the pipeline next year. It would run for 218 miles through eastern North Dakota. It would parallel the Sheyenne River in some locations, and cross it at one spot in Ransom County.

Jones said granting the request of Fargo and the Water Users Association would mean the pipeline may not get a construction permit until March. Construction of the North Dakota segment of the pipeline would not be finished until 2009, he said.

The delays would increase the pipeline's North Dakota construction costs by $65 million to $100 million, Jones said.

"It is fairly unreasonable to me for an established, sophisticated party like the city of Fargo not to have been aware of the Keystone process," he said.

In a regulatory filing Friday, Thomas D. Kelsch, a Mandan attorney for TransCanada Keystone Pipeline LP, said Fargo's fears about the Sheyenne and Lake Ashtabula were raised by members of the public.

"Acknowledging those concerns, Keystone explicitly addressed these issues at the hearing, through the testimony of several expert witnesses," Kelsch wrote in the filing. "The record is replete with information upon which the PSC - and Fargo, if it chose to do so - can evaluate Fargo's stated concerns."

Kelsch's filing said a delay in the Keystone project would hurt North Dakota oil producers "and exacerbate the revenue and tax losses that are being incurred due to the current oil pipeline capacity shortfall in the state."

Jones said TransCanada has acquired property use rights from 80 percent of the affected North Dakota landowners, but he said the company expects to have to acquire some land from unwilling landowners through eminent domain.

Susan Wefald, the Public Service Commission's president, declined comment Friday about the regulatory filing.

Kelsch said the city of Fargo and the Water Users Association had the option of submitting relevant information about their pipeline siting fears without having to reopen the hearing process.

Johnson said reopening the hearings would allow witnesses to testify on the city's behalf and allow city experts to question pipeline developers.

"The preference for most people is to be able to present a human being to talk about things, so that if there are questions about the concepts being discussed, people can ask questions," Johnson said. "Hopefully you get some clarity as a result of that."