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Controversial Keystone XL pipeline route across Nebraska is approved, but hurdles likely remain

Controversial Keystone XL pipeline route across Nebraska is approved, but hurdles likely remain

LINCOLN — Nine years after it was first proposed, the Keystone XL pipeline was granted a route across Nebraska on Monday.

But it was not immediately clear whether the pathway — an alternative route not preferred by TransCanada — will prompt construction of the controversial project.

Instead of celebrating the approval, the Canadian pipeline developer issued a short statement that it was still “evaluating” Monday’s approval, which promises to increase the expense and delay for the $8 billion project.

“As a result of today’s decision, we will conduct a careful review of the (Nebraska) Public Service Commission’s ruling while assessing how the decision would impact the cost and schedule of the project,” said Russ Girling, TransCanada’s president and chief executive officer.

A longtime backer of the pipeline, State Sen. Jim Smith of Papillion, put it more succinctly.

“This creates unnecessary uncertainty,” Smith wrote in a tweet. “Too bad.”

On a 3-2 vote, the Public Service Commission approved a 280-mile-long route across the state, but it was the “mainline alternative route” and not the “preferred route” that Trans­Canada had proposed.

[Q&A: How did we get here, and what's next for the Keystone XL pipeline?]

The new path takes a 63-mile detour from the preferred route and would parallel, for about 100 miles, the existing Keystone pipeline that TransCanada put into operation in 2010.

The decision, while giving the Canadian company a route across Nebraska, raises many questions. The detour will require new right of way contracts with at least 40 landowners, some of whom may not have realized that their land was on a pipeline route.

“It throws the project into a complete question mark,” said Jane Kleeb of Bold Nebraska, the grass-roots group that has led opposition to the Keystone XL.

TransCanada officials have said that they won’t know until December whether they have enough contracts with shippers to make the project financially feasible.

The company did not respond Monday to emailed questions about how the route change might affect that decision.

Opponents of the project, who have promised to file lawsuits to block the project, called the decision mostly a victory because the PSC rejected TransCanada’s preferred route.

“This decision opens up a whole new bag of (legal) issues that we can raise,” said Ken Winston, an attorney for the Sierra Club, which has opposed the pipeline.

Gov. Pete Ricketts, during his monthly radio call-in show, told callers that the pipeline will be “on balance” good for the state, due to the increased taxes and jobs it will generate. But there are more steps in the process, he said.

“So we’ll have to wait and see how that all plays out,” Ricketts said.

Some groups, including Americans for Prosperity and the Consumer Energy Alliance, applauded the decision, saying the Keystone XL would provide “a stable and reliable supply” of oil for the U.S.

Voting to approve the route were PSC Commissioners Tim Schram of Gretna, Frank Landis of Lincoln and Rod Johnson of Sutton. Voting no were Commissioners Crystal Rhoades of Omaha and Mary Ridder of Callaway.

The order to approve the route said there were “many benefits” to having the 36-inch Keystone XL parallel, as much as possible, the 30-inch Keystone pipeline.

Among the benefits, the order said, were better monitoring of the pipeline and quicker response to any problems. The new route also crosses fewer miles of the migration route of the endangered whooping crane.

Commissioners said they could not “twin” the two pipelines across all of Nebraska because that was not among the routes submitted by TransCanada. To do that, they said, also risked upsetting neighboring South Dakota, which established an exit point from that state at Keya Paha County, far west of where the Keystone pipeline enters the state.

By law, the PSC was charged with deciding whether the pipeline route was in “the public interest.”

Safety and the possibility of leaks were not to be considered, including a 210,000-gallon oil leak last week from the Keystone pipeline in northeastern South Dakota. Also not to be considered was whether the project was financially feasible.

The PSC’s Johnson, a farmer and a yes vote for the pipeline, sternly reminded TransCanada in his written comments that the company had made many promises. Those, he said, included that farmland disturbed by pipeline construction would be fully restored and that the Keystone XL would be the safest pipeline in history.

“Nebraskans are counting on that,” Johnson wrote.

The Keystone XL, proposed in 2008, ignited a firestorm of opposition in part because the first planned route crossed the fragile and groundwater-rich Sand Hills region of Nebraska.

In response, TransCanada agreed to reroute its pipeline, and that route was approved by another state agency, the Nebraska Department of Environmental Quality, in 2013.

But in 2015, President Barack Obama rejected the entire project.

After Donald Trump took office this January, he resurrected the Keystone XL. In March, TransCanada applied for approval of the route approved in 2013, though it provided two alternatives, including the one chosen Monday.

The new portion of the alternative route runs from near Neligh, Nebraska, in Antelope County, diagonally across Madison County, and then hooks up with the path of the Keystone pipeline in southwest Stanton County, near Leigh, Nebraska.

One landowner who lives in that area, Van Neidig of Battle Creek, said he was quite sure no one in his area had been told they might be on the pipeline route.

But Neidig added he expected few landowners to oppose it. “We farm around pipelines (already). It’s part of our lives,” he said.

Rhoades, the PSC commissioner from Omaha, said in her written dissent that the due process rights of landowners on the new route were violated because they weren’t informed about it by the state or TransCanada, and thus had no opportunity to comment on the routing process.

Ridder, who was elected to the PSC last year, said that the three routes proposed by TransCanada crossed too much fragile soil and that the best route — alongside the existing Keystone pipeline across the entire state — was not offered.

Monday’s meeting lasted seven minutes.

When the vote was complete, a gasp was heard from among the roughly 25 people crammed into the PSC’s meeting room. More than 60 people listened in an overflow room, including labor union members clad in orange T-shirts, who have supported the pipeline, and Native Americans and Bold Nebraska members, who have fought it.

Some opponents cried after the decision was announced. One small boy held a sign reading, “I can’t drink oil. Water is life.”

The Keystone XL is designed to carry up to 830,000 barrels of oil a day from the tar sands region of northern Alberta to refineries on the U.S. Gulf Coast.

Much has changed in the oil business since the project was proposed, casting doubt on whether the Keystone XL is still needed.

In 2008, crude oil was trading at nearly $150 a barrel, about three times the current price. The Keystone XL was proposed before fracking took off in the U.S., which created an oil boom in North Dakota and Texas, and pushed domestic production to a new record.

Some major oil companies have pulled out of the tar sands region in recent months due to the depressed prices and worldwide glut of oil, plus the higher cost of turning the tar sands into synthetic crude. And other pipeline projects have been completed to ship crude oil.

World-Herald staff writers Joe Duggan and Martha Stoddard contributed to this report., 402-473-9584

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Correction: A map previously used with this story misidentified Alberta, Canada.

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Reporter - Regional/state issues

Paul covers state government and affiliated issues. He specializes in tax and transportation issues, following the governor and the state prison system. Follow him on Twitter @PaulHammelOWH. Phone: 402-473-9584.

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