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Nebraska Advances Bill to Re-Route TransCanada’s Keystone XL

Nov. 10 (Bloomberg) -- Nebraska lawmakers in a special session have signaled early support for a bill that would give the state’s governor authority over pipeline routes, potentially threatening TransCanada Corp.’s proposed Keystone XL.

A legislative committee late yesterday advanced the Oil Pipeline Route Certification Act, State Senator Annette Dubas, who voted for the bill, said in an interview today. Governor Dave Heineman has said he opposes Keystone XL’s proposed path because it crosses an ecologically sensitive area in Nebraska and threatens drinking water sources to 1.5 million people.

The 1,661-mile (2,673-kilometer) pipeline is being reviewed by the U.S. State Department, which has jurisdiction over the project because it crosses an international border. A decision is expected by the end of the year. Any delay would “seriously jeopardize” the project, TransCanada’s Chief Executive Officer Russ Girling has said. The Calgary-based company and its legal advisers said on Oct. 31 that Nebraska doesn’t have the authority to re-route the pipeline.

“It’s critical to have some way to represent Nebraskans and hold these companies accountable for what they say they will do,” said Dubas. “We have to have an oversight mechanism.”

The bill advanced out of the Natural Resources Committee by a vote of seven to one.

The $7 billion pipeline would deliver 700,000 barrels a day of crude from Alberta’s oil sands to the Gulf of Mexico by crossing Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Governor’s Authority

The proposed law gives the governor the power to certify pipeline routes within 90 days of a company submitting an application. The legislation would take effect immediately and force TransCanada to submit an application to the state under the new guidelines.

The bill would also prohibit the use of eminent domain to seize land for building a pipeline if the state hasn’t yet granted approval for a project’s route.

The full Nebraska legislature is expected to begin debating the bill on Nov. 14, where 33 votes of the 49-member unicameral legislature are needed to pass the bill. Nebraska law requires a two-thirds majority for “emergency” laws that take effect immediately upon passage.

TransCanada opposed the law along with two others proposed in the special session dealing with pipeline routes. States cannot usurp the federal government’s authority over pipelines, Robert Jones, vice president of Keystone for TransCanada, testified Nov. 8.

New Law Unnecessary

Jones also said the laws were unnecessary because the state had been involved in the three-year permit review being conducted by the State Department,

The State Department is weighing whether to ask TransCanada to reroute the line away from Nebraska’s Sandhills region, a marshy, dune-like expanse that overlies the Ogallala aquifer, which supplies much of the state’s water for drinking and agriculture.

Lawyers representing TransCanada have testified several times this week that any laws passed by Nebraska lawmakers seeking to re-route the Keystone XL may be unconstitutional because individual states can’t make decisions impeding interstate commerce.

To contact the reporter on this story: Bradley Olson in Lincoln, Nebraska at bradleyolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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