Nebraska gives long-delayed Keystone XL pipeline new life

Nebraska regulators Monday approved a Keystone XL oil pipeline route through the state, breathing new life into the long-delayed $8 billion project, although the chosen pathway is not the one preferred by the pipeline operator and could require more time to study the changes.

The Nebraska Public Service Commission's vote also is likely to face court challenges and may require another federal analysis of the route, if project opponents get their way.

"This decision opens up a whole new bag of issues that we can raise," said Ken Winston, an attorney representing environmental groups that have long opposed the project.

Environmental activists, American Indian tribes and some landowners have fought the project since it was proposed by TransCanada Corp in 2008. It would carry oil from Canada through Montana, South Dakota and Nebraska to meet the existing Keystone pipeline, where it could move as far as the U.S. Gulf Coast. Business groups and some unions support the project as a way to create jobs and reduce the risk of shipping oil by trains that can derail.

President Barack Obama's administration studied the project for years before finally rejecting it in 2015 because of concerns about carbon pollution. President Donald Trump reversed that decision in March.

The route approved 3-2 by the Nebraska commission would be five miles longer than the one TransCanada preferred and would require an additional pumping station. Commissioners who voted for it said the alternative route would affect less rangeland for endangered species. The commission was not allowed to take into account a leak last week of 210,000 gallons from the existing Keystone pipeline onto South Dakota farmland because pipeline safety is a federal responsibility.

TransCanada CEO Russ Girling issued a statement after the ruling saying the company would study "how the decision would impact the cost and schedule of the project."

TransCanada has said that it would announce in late November or early December whether to proceed with the pipeline — which would carry an estimated 830,000 barrels of oil a day — and would take into account the Nebraska decision and whether it has lined up enough long-term contracts to ship oil.

The company submitted three proposed routes to the Nebraska commission. The preferred route would have taken a more direct diagonal north to south path across the state and a third route was rejected because it would have crossed the environmentally-fragile Sandhills area.

Keystone XL would expand the existing Keystone pipeline network that went into service in July 2010. The current pipeline runs through North Dakota, South Dakota, Nebraska, Kansas, Oklahoma and Texas and extends east into Missouri and Illinois.

More than 90 percent of Nebraska landowners along TransCanada's preferred route have agreed to let the company bury the pipeline beneath their property, but those who oppose it have managed to thwart the project for years. Approval of the route gives TransCanada the ability to seize the land of holdout landowners through eminent domain. The company has said it will use eminent domain only as a last resort.

The approved route would follow the path the company prefers through four northern Nebraska counties. But instead of turning south as company officials had hoped, it would continue southeast to the path of the original Keystone pipeline. The new Keystone XL would then run parallel to the original Keystone pipeline to Steele City, Nebraska, where it would connect to an existing pump station.

"We see many benefits to maximizing the co-location of the Keystone XL pipeline with Keystone I," the Commission majority wrote. "It is in the public interest for the pipelines to be in closer proximity to each other, so as to maximize monitoring resources and increase the efficiency of response times."

Jane Kleeb, executive director of Bold Alliance, a pipeline opposition group, said her coalition still needed to review its options, but added, "We will stand and fight every inch of the way."

The federal government has a say in whether the pipeline is built because it crosses an international border from Canada. Opponents hope the change in the route through Nebraska will require a new review by the U.S. State Department.

A State Department spokeswoman said via email Monday that the agency was aware of the Nebraska commission's vote and was gathering information to decide if the decision would affect the federal permit Trump approved.

The Public Service Commission is composed of four Republicans and one Democrat, all directly elected by district. Kleeb said pipeline opponents plan to challenge two of the Republican commissioners, Frank Landis and Tim Schram, who voted for the alternative route and are up for re-election in the 2018 general election. The commissioners said they wouldn't comment beyond their written statements because their decision could be subject to a court review.

Commissioner Crystal Rhoades, the commission's lone Democrat, said in a dissenting opinion that she was particularly concerned that the alternative route could violate the due process rights of landowners who live along the new route.

"These landowners will now have their land taken by the applicant and they may not even be aware that they were in the path of the approved route," she said.

Opponents could appeal the decision to a state district court, and the case would likely end up before the Nebraska Supreme Court. The commission was forbidden by law from considering a recent oil spill in South Dakota on the existing Keystone pipeline in its decision.

"This is a long and winding road," said Brian Jorde, an attorney for the landowners.