The Nebraska Supreme Court on Friday removed a serious hurdle to construction of the controversial Keystone XL pipeline, ruling that then-Gov. Dave Heineman had the authority to approve the project's route without review by a state agency.
A 2012 law allowed Heineman to bypass the state Public Service Commission and give the $5.3-billion project the go-ahead. In February, a lower court declared that law unconstitutional and left the troubled pipeline with no approved route through Nebraska.
The action Friday struck down the lower court's ruling and cleared the way for the Obama administration to decide whether to grant final approval for the project.
The proposed pipeline would transport oil from Alberta, Canada, to Steele City, Neb. From there, it would tie into a southern leg, already in operation, which would transport the oil to the Gulf Coast.
"In a split decision, Supreme Court is allowing LB1161 to stand," Jane Kleeb, founder of Bold Nebraska, an anti-pipeline group, tweeted early Friday. "4 of the justices ruled w/ landowners, but we needed 5. Its up to Obama."
"Because there are not five judges of this court ruling on the constitutionality of L.B. 1161, the legislation must stand by default," the decision said. "Accordingly, we vacate the district court's judgment."
Environmentalists argue that the extraction and production of tar sands -- also known as oil sands -- are significantly more damaging to the climate than conventional oil deposits, and they contend that blocking the pipeline would impede development of the fossil fuel.
Anthony Swift, staff attorney at the Natural Resources Defense Council, describes tar sands as a very thick, heavy crude oil with the consistency of "peanut butter at room temperature, somewhere between coal and oil."
The material, he said, is "very energy-intensive to get out of the ground." Mining consists of "stripping the oldest boreal forests in the world and strip-mining, using large amounts of water."
Or, he said, "it's done through drilling and pumping steam into the ground to melt it out of the ground. It's incredibly destructive at the upstream, very carbon-intensive and has substantial impact on the indigenous populations in the area."
The pipeline, which TransCanada calls "the largest infrastructure project currently proposed in the United States," would carry 830,000 barrels a day, and construction of the pipeline alone would create 9,000 jobs for skilled American workers.
In addition, manufacturing the steel pipe, fittings, valves, pumps and control devices required for the project would create an estimated 7,000 jobs, the company says.
"The Canadian Energy Research Institute predicts that Keystone XL will add $172 billion to America's gross domestic product by 2035," the company said on its website, "and will create an additional 1.8 million person-years of employment in the United States over the next 22 years."
But with the rising costs of production and the steep drop in oil prices, industry analysts are questioning whether the plan still makes economic sense.
Because the proposed pipeline would cross the U.S.-Canadian border, the State Department must rule that the project is in the United States' national interest and grant a permit. TransCanada applied to the State Department in 2008.
Faced with delays and objections to the original route, the Nebraska Legislature enacted a law in 2012 designed to expedite approval and routing of major pipelines. That law allowed the governor to approve projects instead of the state's Public Service Committee.
In January 2013, Heineman approved a route that would run for 250 miles underground through the state and forwarded that approval to the Obama administration. Heineman left office this week and Republican Gov. Pete Ricketts was sworn in Thursday.
Lancaster County District Judge Stephanie F. Stacy struck down the law 10 months ago, declaring that it was unconstitutional. Her decision came in a lawsuit filed by three property owners whose land was in the pipeline's path.
The state attorney general appealed the decision, and on Friday, the Nebraska Supreme Court ruled.
Kleeb said the decision was "a big deal for precedents for states' rights and what states can legally do for pipeline routing. It's a big deal for eminent domain, determining when an oil pipeline company can use eminent domain on landowners."
Nebraska rancher Randy Thompson, the lead plaintiff in the case, expressed deep disappointment with the Friday decision, but also alluded to further legal action, telling reporters in a conference call that “this may not be over yet.”
“I’ve been involved in this thing for seven years,” Thompson said. “This has been tremendously upsetting for landowners in this process and the fact that the political leaders try to kick our butts along with TransCanada. It’s time for the president to put an end to this damn thing and let us get back to our lives and raising food for America.”
Sierra Club Executive Director Michael Brune said the decision makes one thing clear: “All of the uncertainty has been removed. President Obama has all he needs to reject this pipeline.” During the same conference call with reporters, Brune said it is “not whether the president will reject this pipeline, but when.”
The proposed pipeline, he said, is not constitutional. “We also believe that it is not moral or ethical,” and it also “is not in our country’s interest. We are looking forward to putting this debate to an end when the president rejects this pipeline once and for all.”
The House of Representatives is poised to vote on a bill to make the pipeline a reality, forcing the president’s hand.
House Speaker John Boehner said Friday that “President Obama is now out of excuses for blocking the Keystone pipeline and the thousands of American jobs it would create. Finally, it’s time to start building.”
White House spokesman Eric Schultz issued the following statement Friday:
“Today, the Nebraska Supreme Court denied a challenge to the validity of the route for the Keystone XL Pipeline under Nebraska law. The State Department is examining the court’s decision as part of its process to evaluate whether the Keystone XL Pipeline project serves the national interest. As we have made clear, we are going to let that process play out. Regardless of the Nebraska ruling today, the House bill still conflicts with longstanding executive branch procedures regarding the authority of the president and prevents the thorough consideration of complex issues that could bear on U.S. national interests, and if presented to the president, he will veto the bill.”
Bold Nebraska wants the pipeline stopped at all costs, but a final determination could be months away.
"We think the best route for landowners is no route," Kleeb said. "Everyone wants this pipeline to be rejected so they can have their lives back. If you're a landowner, you're waking up and going to sleep thinking about this."
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