Keystone XL Foes Restart Nebraska Land War With Bigger Army

Nebraska landowners trying to derail TransCanada Corp.’s Keystone XL pipeline plans are getting another chance.

And this time around there are more than 90 of them instead of just three.

Lawyers for the landowners will ask a state court judge in O’Neill Thursday for an order blocking TransCanada’s appropriation of property on the pipeline path. The owners claim the state law allowing the company to use their land was illegal.

The courtroom arguments from the Nebraska plains follow Wednesday’s 270-152 vote by the House of Representatives to allow the pipeline, legislation that President Barack Obama has vowed to veto. White House officials said the bill would circumvent its review, which includes the U.S. Environmental Protection Agency’s conclusion that developing the oil sands for the Keystone XL pipeline will significantly boost emissions of gases tied to climate change.

If completed, the $8 billion, 1,179-mile (1,897-kilometer) conduit would carry 830,000 barrels of crude oil a day from Alberta’s oil sands into Montana, then South Dakota and finally to a junction in Steele City, Nebraska, from where it will be shunted to Gulf Coast refineries.

First proposed in 2008, the project has been stalled by Obama administration review and the determined opposition of property owners.

Keystone Route

TransCanada’s ability to cut through the state’s hills and prairies hinges on a 2012 law giving the governor the power to determine the Keystone XL route.

The legislation violated the state’s constitution, which reserves that power for the Nebraska Public Service Commission, the landowners’ lawyers argued in an earlier case that was thrown out by the state’s highest court on Jan. 9. Three of the high court’s judges concluded the landowners failed to establish they had the right to sue because they hadn’t shown their property would be crossed by the pipeline, whose exact route hadn’t been made public.

Still, four of the state’s seven Supreme Court justices said in the decision that the landowners’ lawyers correctly argued that the state commission regulating piplelines was illegally bypassed. Had one more judge concurred, creating a super-majority decision, TransCanada would have been forced then to go to the commission for approval.

TransCanada Warnings

That ruling may now work in favor of Keystone XL opponents because TransCanada, relying on eminent domain powers granted by the governor, told many Nebraskans in December that it would be building the pipeline across their land.

At least 90 landowners are now suing in two separate cases, the first with more than 60 of them in O’Neill. The 30 remaining landowners, represented by the same lawyers, will get their chance to persuade a judge to block the pipeline at a hearing set for Feb. 23 in York, Nebraska.

TransCanada hasn’t filed papers opposing the landowners’ request in the two new cases and Shawn Howard, a spokesman for the Calgary-based company, declined to comment on them. TransCanada has agreed to financial terms with about 90 percent of landowners along the pipeline route, Howard said.

Nebraska Attorney General Doug Peterson has told the O’Neill judge that one of his lawyers will appear for Thursday’s proceeding. Peterson didn’t take a position on the issue in a Feb. 10 court filing. His spokeswoman, Suzanne Gage, didn’t respond to a phone respond to a phone message seeking comment.

Judges’ Findings

“Every judge who has ever opined on the merits has ruled for the landowners,” David Domina, the lead lawyer for the group, said in a phone interview. That includes the trial court judge in Lincoln, whose decision was erased by the high court.

Anthony Schutz, a law professor at the University of Nebraska at Lincoln, said while the prior rulings don’t control what Holt County District Judge Mark Kozisek in O’Neill will do, they’ll certainly be influential.

“Judges don’t like to be reversed on appeal,” Schutz said. “From a district court perspective, all you’re trying to do with a matter that hasn’t been decided clearly is predict what a higher court is going to do.”

Here, the judge already knows what some of the Supreme Court’s judges think of the challenged statute, Schutz said.

While the judge could choose a different path, having the the earlier ruling by Supreme Court’s majority on the same issue gives the landowners a good indicator of their likelihood of success, he said.

“That aspect of it is really unprecedented as far as I can tell,” Schutz said.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE