Nebraska case will likely push KXL decision to 2015

Aug 12, 2014

A Nebraska court case essential to the U.S. government’s approval of the Keystone XL project will probably not be decided until next year, lawyers said.

The dispute concerns which state agency has the authority to approve the project’s construction in Nebraska. Landowners who oppose TransCanada Corp’s project want the decision to come from the five-member Nebraska Public Service Commission. In February, a district court affirmed that condition, but Nebraska Governor Dave Heineman, who supports the project, has asked the Nebraska Supreme Court to hear the case.

According to a Reuters report, the final ruling is not likely until January 2015. The U.S. State Department said in April that it would wait until the Nebraska case was resolved before making a final decision on Keystone XL.

The expected delay in the Nebraska case makes it increasingly likely the Keystone XL issue will remain unresolved through the U.S. mid-term elections in November. The Nebraska Supreme Court is set to hear first oral arguments in the case on Sept. 5, Reuters said.

"These things typically take three to six months," anti-pipeline activist Jane Kleeb told Reuters. "We have always thought the decision will come in January."

The 1,200-mile pipeline from Western Canada to the Texas Gulf Coast requires federal approval because it crosses and international boundary. The southern leg of the line, which runs from Cushing, Okla., to refineries in Southeast Texas, went online in January. That part of the project runs through parts of Fannin, Lamar, Delta, Hopkins, Franklin and Wood counties on its way from Oklahoma to the Gulf of Mexico.

Supporters of the project say that Keystone XL’s projected 830,000 barrel-per-day capacity would create economic growth in the U.S. as well as Canada. Refineries in Texas would process Canadian tar sands crude oil, most of which would be shipped overseas from Texas ports.

Opponents have cited various concerns, including the resource-intensive and environmentally damaging extraction process for tar sands crude, landowner rights, safety of the pipeline and the impact of the project on climate change.

The federal study of the project has focused on Keystone XL’s projected impact on climate rather than other concerns. A report published by the State Department in February said that the project would not significantly impact the global production of greenhouse gases identified as contributing to climate change.

Credit TransCanada Corp.

A report published this week by the London-based scientific journal Nature Climate Change contradicts that finding, saying that the State Department’s study did not account for the projects effect on global market dynamics. The Nature Climate Change report, which details a study by the Sweden-based Stockholm Environment Institute, said that Keytsone XL could produce as much as four times the amount of greenhouse gases as projected by the State Department’s document.

The Canadian government protested the Nature Climate Change report, saying that development of Canadian tar sands crude will occur at essentially the same level regardless of whether the U.S. government approves Keystone XL.

In June, the State Department amended its February report, saying it had underestimated the number of railroad accidents likely if Keystone XL is rejected. Rail transport of tar sands crude oil is an alternative for TransCanada if there is a gap in its projected pipeline system.