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 Nebraska Governor Dave Heineman last year supported legislation
that cleared the way for TransCanada Corp's $5.4 billion pipeline to
cross parts of his state.
But some landowners objected to the legislation, saying it
disregarded their property rights.
On Wednesday, the District Court of Lancaster County sided with
landowners, a move that makes inevitable additional months of delay
to the project, already more than five years in the planning.
The Nebraska Public Service Commission, or PSC, is the proper state
agency to decide pipeline matters, Judge Stephanie Stacy wrote in a
lengthy ruling, declaring the governor's decision "unconstitutional
and void."
State officials and a lawyer for landowners agreed a new permit
application for the pipeline could require at least six months of
work — and probably much longer.
Heineman filed a notice later on Wednesday appealing the decision to
a state appeals court. An appeal could also take months.
"The legislature will either have to fix (the law) or the attorney
general will have to decide to take his chances in the state Supreme
Court, one of the two, or both," said David Domina, who represented
several landowners in the case.
Supporters say Keystone XL would create thousands of jobs and cut
U.S. fuel costs by reducing the nation's reliance on oil imports
from countries less friendly than Canada. They also cite U.S.
government reports about the dangers of moving crude oil by rail as
an alternative to the pipeline.
Critics say it would harm the environment and hasten climate change
by promoting oil-extraction methods in Alberta that produce high
levels of carbon dioxide emissions.
Republican lawmakers have urged President Barack Obama for years to
approve the pipeline. The Democratic president is also under
pressure from several vulnerable senators in his own party who favor
the pipeline and face re-election at a time when Democrats are
fighting to maintain control of the U.S. Senate in November's
elections.
Obama has said he will have the final word on the project. That
decision is not expected before May.
Keystone foes said they hoped to make the most of additional delays.
"This court decision provides more uncertainty for pipeline
proponents, and more time to organize for pipeline opponents," said
Dan Weiss, a senior fellow with the Center for American Progress,
which opposes the plan.
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POLITICALLY CHARGED
The Keystone XL pipeline has become freighted with political meaning
for Obama, who says he is committed to energy independence and
weaning the nation off fossil fuels blamed for climate change.
Canada's oil sands are the world's third's largest crude oil
reserve, behind those of Venezuela and Saudi Arabia, but extraction
of the thick, gritty substance is emissions-intensive.
Responding to the decision on Wednesday, TransCanada said it was
disappointed and would examine its legal options.
"We will now analyze the judgment and decide what next steps may be
taken," company spokesman Shawn Howard said.
Laura Demman, director and legal counsel for the Nebraska PSC, said
TransCanada would need to submit an application to route the
pipeline through the state. The commission would have seven months
to review the application and could get an extension of up to 12
months.
The U.S. State Department said on January 31 in an 11-volume
environmental impact statement that approving Keystone XL would not
unduly worsen climate change. Several federal agencies were given up
to 90 days to weigh in with their own views. It is unclear how the
Nebraska ruling will affect that process.
Keystone was expected to be discussed by Obama and Canadian Prime
Minister Stephen Harper at a one-day North American leaders' meeting
on Wednesday in Toluca, Mexico.
The planned 1,179-mile (1,900-km) northern leg of the Keystone
pipeline would run from the province of Alberta to Steele City,
Nebraska, where it would connect with an already operational line
that runs to the U.S. Gulf — a system that could move more than
800,000 barrels of crude each day.
(Additional reporting by Timothy Gardner in Washington, Mica
Rosenberg in New York and Scott Haggett in Calgary; editing by Ros
Krasny and Peter Cooney)
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