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Nebraska Supreme Court Ruling Removes Keystone XL Roadblock

Developments over the controversial Keystone XL oil pipeline continued on Friday, after the Nebraska Supreme Court ruled that a law granting Gov. Dave Heineman the power to approve the pipeline's route through the state could stand.

Meanwhile, a bill authorizing construction of the pipeline, H-3, cruised through the U.S. House of Representatives on Friday, easily winning passage by a 266-153 vote. The tally included the votes of 28 Democrats.

In a 4-3 decision, Nebraska's high court said it expressed no opinion over the constitutionality of LB 1161, a law Heineman signed in 2012 that gave him the authority to bypass the state's Public Service Commission (PSC) and decide the pipeline's route (see Shale Daily, April 18, 2012). A district court ruled in the case Thompson v. Heineman that the law was unconstitutional because it divested the PSC of its regulatory powers.

"Given this court's division on the issue of standing in this case, there is neither a five-member supermajority to hold that LB 1161 is unconstitutional nor a three-member minority which could uphold its constitutionality," the high court said. "Due to this impasse, the constitutional challenge to LB 1161 cannot be resolved one way or the other in this case."

Supporters of the pipeline said the ruling was good news because it should assuage concerns raised by the U.S. Department of State last year over how Nebraska's high court would rule on the issue. The project needs approval by the State Department and a presidential permit to proceed (see Shale Daily, April 21, 2014; March 4, 2013).

Harry Weiss, an environmental and energy attorney with Philadelphia-based law firm Ballard Spahr LLP, called the Nebraska ruling “a procedural quirk” that takes the PSC out of deciding the route for Keystone XL.

“[But] that’s one small hurdle compared to the larger hurdle of both the State Department’s review and President Obama’s veto power,” Weiss told NGI’s Shale Daily on Friday.

“I can’t pretend to speak for the State Department, [but] if that was an automatic condition, one would have thought the State Department decision would have been out today. Given the action by Congress and what the president has said, the real game right now is going to be played out in Congress, at least for the short term.

“It clearly removes an obstacle that could be used to justify further delay. The question is are there other excuses. There may or may not be. Let’s face it, this is a political struggle and has been for quite some time.”

On Capitol Hill, the Senate Energy and Natural Resources Committee approved its version of a bill authorizing construction of the pipeline by a 13-9 vote Thursday (see Shale Daily, Jan. 8). The committee's new chairman, Sen. Lisa Murkowski (R-AK), hailed the state court's ruling.

"Today's court decision wipes out President Obama's last excuse," Murkowski said Friday. "He's had six years to approve a project that will increase U.S. energy supplies and create closer ties with our nearest ally and neighbor, and he's refused to act. Regardless of whatever new excuse he may come up with, Congress is moving forward."

Jack Gerard, CEO of the American Petroleum Institute, agreed. "President Obama has no more excuses left to delay or deny the Keystone XL pipeline," Gerard said Friday. "More stable domestic and Canadian oil will enhance our nation's national and economic security. The project has strong bipartisan support on Capitol Hill and a majority of Americans want to see it approved."

But Keystone XL's detractors weren't swayed by the Nebraska ruling.

"Ultimately, the route was held up on a technicality rather than the merits of the route or the pipeline, and while the ruling may settle the question of the proposed pipeline's route, it doesn’t change the facts about this project's potential devastating impacts on the land, water and climate," the Natural Resources Defense Council said Friday.

Michael Brune, executive director of the Sierra Club, added separately that the ruling "has no effect on the president's authority to make the decision to reject the Keystone XL tar sands pipeline. The president has repeatedly stated that he will reject the tar sands pipeline if it fails to meet the national interest and if it contributes to the climate crisis -- and this court ruling has nothing to do with either of those things.

"Moreover, this court ruling does not change the fact that Congress is pushing legislation to force approval of a dirty, dangerous project that attacks the president's longstanding authority. Ultimately, the president has all the evidence he needs to reject Keystone XL now, and we are confident that he will."

Obama threatened to veto any bill authorizing construction of Keystone XL on Tuesday (see Shale Daily, Jan. 6). The Senate bill, S-1, would authorize TransCanada Corp. to construct and operate the pipeline, which would run from Alberta, Canada, to the U.S. Gulf Coast and transport 830,000 b/d to U.S. refineries, including 100,000 b/d from the Bakken Shale (see Shale Daily, May 7, 2012).

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