Nebraska judge’s ruling threatens Keystone pipeline

A state judge in Nebraska has dealt another setback to the long-debated Keystone XL pipeline, ruling that a state law passed in 2012 violated the state’s constitution by giving the governor power to approve the pipeline’s route.

The pipeline “has become a political lightning rod for both supporters and opponents,” Lancaster County District Judge Stephanie F. Stacy wrote, “but the issues before this court have nothing to do with the merits of that pipeline.” Instead, she said, the case involved the Nebraska Constitution’s grant of authority to the five-person Public Service Commission for “regulation of rates, service and general control of common carriers,” which includes pipelines.

“It is clear the Legislature cannot … divest the PSC of jurisdiction over a class of common carriers and vest such power in another governmental agency,” such as the governor, the judge ruled.

Even though the state is almost certain to appeal the decision to the Nebraska Supreme Court, those legal proceedings will, at minimum, further delay the decision over the pipeline. Extended litigation could give the Obama administration, which is in no hurry to resolve the politically controversial issue, an excuse to postpone a decision on whether to issue the required federal permit.

If the decision is upheld, TransCanada, which is seeking to build the pipeline, would have to reopen proceedings to approve its route through Nebraska, a step that could lead to years of additional delay.

The proposed $5-billion pipeline would run more than 1,000 miles from the tar sands deposits of Alberta, Canada, to Cushing, Okla. A key stretch of more than 200 miles would cut through Nebraska, where some landowners have long tried to block it.

The pipeline’s initial route would have run above environmentally sensitive aquifers that supply a large percentage of Nebraska’s water. After that plan proved controversial in the state, TransCanada submitted a new proposed route that avoided most of the disputed areas.

In 2012, with that new proposed route being debated, the Nebraska Legislature passed a law that took the decision away from the Public Service Commission and allowed TransCanada to seek approval from Republican Gov. Dave Heineman. On Jan. 22, 2013, Heineman approved its route request.

A group of landowners sued, saying the new state law violated several parts of the state constitution. Judge Stacy rejected most of their claims but agreed that the Legislature could not shift power over a pipeline decision from the Public Service Commission to the governor.

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Twitter: @DavidLauter