WASHINGTON – TransCanada Corp. faces a serious dilemma as court actions in Nebraska have left its giant 1,900-kilometre Keystone XL pipeline in legal limbo.
Even though Nebraska Gov. Dave Heineman announced he is appealing Wednesday’s district court ruling that stopped the pipeline, the move likely will only delay the crippled project even more.
A local Nebraska judge struck down a law that gave Heineman the power to approve the 321-km Nebraska leg of the Keystone and to expropriate land for the project. District Court Judge Stephanie Stacy ruled that the Nebraska law, which was approved at the tail end of the 2012 legislative session, is unconstitutional because it takes the power to approve pipeline routes away from the state’s Public Services Commission (PSC).
The ruling means that TransCanada, which owns the project, has no permit to build its pipeline through Nebraska. The company also has to face the problem that unless the appeals court voids the judgment or unless the state finds a legislative fix, there is no longer any legal structure in Nevada to approve a pipeline route.
Essentially, Keystone’s Nebraska leg is paralyzed.
[There is a video that cannot be displayed in this feed. Visit the blog entry to see the video.]“The previous attempt to create a legal process for the filing of an application for a pipeline has been declared invalid,” David Domina, lawyer for the landowners who sued the state, said in an interview. “So at the moment there is no available process.”
He added that the appeals process will likely take about a year and said the Nebraska governor will probably lose. “We had extraordinarily strong legal arguments,” he said. (This week’s judgment) really did not come as a surprise.”
Domina said that one solution for TransCanada is to build the Keystone XL parallel to its existing Keystone pipeline that runs along the eastern border of the state.
“We have been asking for three years why they won’t do that and they refuse to answer,” he said. “My suspicion is they want to build this pipeline and sell it and they can’t accomplish that if they put this pipeline in the old easement, because they would have to sell a fractional interest in the easement and that becomes a very complicated legal proposition.”
The Nebraska Keystone section travels through land owned by about 500 ranchers and farmers. TransCanada has signed agreements with most of them, but about 115 remain unsigned.
Domina blamed TransCanada for the litigation and for the problems the company has had signing up landowners. “There is a lot of empathy for Nebraska landowners who have not been well-treated by TransCanada,” he said.
Landowners are accustomed to signing easements to power and energy companies without problems, he said. But TransCanada sent in its land men to threaten the landowners and they didn’t like that. “I think the misconduct of the company is a bigger issue than the merits of the project,” he said.
TransCanada did not respond to requests for comment.
The company has recently offered the holdouts hefty signing bonuses of about $70,000 U.S., according to ranchers. But some of the landowners now say they won’t sign at any price.
Heineman has not said if he intends to request an expedited hearing that would put his case before the appeals court in the coming weeks. He is also looking at possible legislative fixes that would avoid more court hearings. This would require a special legislative session and it’s not clear Heinemen could gather the votes he needs.
[There is a video that cannot be displayed in this feed. Visit the blog entry to see the video.]Stacey handed down her judgment the same day Prime Minister Stephen Harper was bending President Barack Obama’s ear again to approve Keystone. The judgment also followed a positive U.S. federal environmental assessment study of the Keystone. The ruling, however, has seriously dampened hopes that Obama would grant the Keystone final approval within the next four months. Obama has stated he will take support into consideration.
Jane Kleeb, founder and director of Bold Nebraska, the lead activist group fighting construction of the Keystone in Nebraska, said in an interview that if the appeals court overturns the Stacey ruling, she and the three landowner plaintiffs will fight it all the way to the Nebraska Supreme Court.
The pipeline will transport up to 840,000 barrels a day of bitumen from Alberta’s oilsands and heavy oil from South Dakota to Texas Gulf Coast refineries.
