Read more Keystone XL coverage from The World-Herald here.
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WASHINGTON — President Barack Obama's official rejection of the Keystone XL pipeline Wednesday means new hurdles for the controversial project, both at the federal and state levels, and casts doubt over its future.
Pipeline supporters and opponents both vowed to continue what has become a national political battle royal.
TransCanada announced that it would submit a new permit application and continue to work with the Nebraska Department of Environmental Quality to identify an alternative route around the state's environmentally sensitive Sand Hills.
“TransCanada remains fully committed to the construction of Keystone XL,” Russ Girling, TransCanada's president and chief executive officer, said in a statement. “Plans are already under way on a number of fronts to largely maintain the construction schedule of the project.”
TransCanada said it expects the new application to be “processed in an expedited manner” that makes use of the environmental reviews that have been completed since its first application was filed more than three years ago. It said an expedited review would allow the pipeline to be in service by late 2014.
But Assistant Secretary of State Kerri-Ann Jones said the new application would trigger a “completely new review process,” and TransCanada would have to jump through all the hoops it did on its first application. She said provisions in the law allow the State Department to use existing environmental reviews for a new application but said it was unclear whether doing so would speed up a decision on the Canada-to-Texas pipeline.
Wednesday's decision also raises questions about the way forward in Nebraska, where state officials had struck a deal with TransCanada to reroute the Nebraska portion of the 1,700-mile pipeline around the groundwater-rich Sand Hills.
Part of the deal was that Nebraska would finance the $2 million review of the new route. Will state leaders want to invest that amount of money in a project that now seems less certain?
Mike Flood of Norfolk, speaker of the Nebraska Legislature, who crafted the deal with TransCanada, said the federal denial raises plenty of questions, including the “$2 million question.”
The Legislature also passed legislation during a special session in November to deal with future pipeline proposals. Would a new Keystone XL application fall under that bill, which requires an extensive review by the State Public Service Commission, which would be paid for by TransCanada?
If that's the case, is the deal to bypass the Sand Hills still good?
“It kind of throws everything up for evaluation,” said Mike Linder, director of the Environmental Quality Department.
Gov. Dave Heineman, who called the Legislature into special session amid growing public concern about the Keystone XL route, expressed disappointment with Obama's decision to leave Americans “unnecessarily unemployed.”
“President Obama should be focused on putting Americans back to work, and could have done so by issuing conditional approval of the pipeline,” Heineman said in a statement.
Conditional approval, he said, would have allowed TransCanada to move forward while Nebraska finished its review of a new route around the Sand Hills.
“The president's decision is disruptive, and we are now going to review in detail what this means for Nebraska,” he said.
Jones rejected Heineman's conditional permit suggestion.
“It's important for us to look at the whole pipeline and not to really move forward on such a major infrastructure project that will be a part of the country and the landscape for many years in pieces like that,” Jones said.
Linder said Nebraska three weeks ago submitted its proposed “memorandum of understanding” to the State Department on how to proceed with reviewing the Sand Hills detour and had not received a response.
That memorandum would spell out what environmental review work Nebraska would perform and what federal officials would do in assessing the roughly 100-mile detour around the Sand Hills. State Department officials did not respond to World-Herald questions about the status of the memorandum.
TransCanada had said that once the memorandum was finalized, they would submit a proposed “corridor” for a new route. A specific detour route would be submitted sometime later, company officials said, after the proposed corridor received state approval.
The White House and the State Department blamed the permit denial on a Feb. 21 deadline that was included, at congressional Republicans' insistence, in the payroll tax cut extension.
The State Department made specific mention of the route shift around the “uniquely sensitive terrain of the Sand Hills in Nebraska” and said the deadline provided insufficient time to study alternative routes.
“This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people,” Obama said in a statement.
“I'm disappointed that Republicans in Congress forced this decision, but it does not change my administration's commitment to American-made energy that creates jobs and reduces our dependence on oil.”
Environmental groups welcomed the move as a major victory over the oil industry. Bold Nebraska's Jane Kleeb said it was a proud day for the state.
“We just protected the Ogallala Aquifer, and we protected farmers' and ranchers' livelihood,” Kleeb said.
Pipeline opponents also declared their intention of continuing the fight against any new application.
“Keystone XL will still face the same valid public concerns and fierce opposition as the first time,” Frances Beinecke, president of the Natural Resources Defense Council, said in a statement. “No matter how many times it is proposed, Keystone XL is not in the national interest.''
Republicans blasted the decision as an example of putting election-year politics over the good of the country and said the president was afraid of offending a key bloc of supporters.
House GOP leaders vowed to continue pressing for approval of the pipeline and said all legislative options are on the table.
“This is not the end of the fight,” said House Speaker John Boehner, R-Ohio.
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One option is Rep. Lee Terry's legislation, which would essentially mandate approval of the pipeline. The Omaha Republican has been one of the pipeline's leading backers on Capitol Hill. Discussions about similar Senate legislation are also under way.
Sen. Mike Johanns, R-Neb., said he was open to legislation that would force approval of the project as long as it protected the Nebraska process for moving the pipeline out of the Sand Hills, although he wants to see the details of any proposal before throwing his support behind it. He also said the denial of the permit has thrown the pipeline into a “procedural quagmire.”
Terry was asked Wednesday whether Congress mandating approval of the pipeline would pass constitutional muster.
“We're going to talk to our lawyers about that,” Terry said.
Contact the writer:
202-630-4823, joe.morton@owh.com
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