A Nebraska judge threw a major hurdle in front of the Keystone XL oil pipeline Wednesday, setting into motion yet another review of the $7 billion project and pushing President Obama’s eventual final decision even further down the road.
In a long-awaited ruling that environmentalists hoped would delay and possibly derail the pipeline, Lancaster County Judge Stephanie Stacy ruled that the Nebraska Public Service Commission, not Gov. Dave Heineman, a Republican, should have decided whether to green-light the Keystone route through the Cornhusker State.
Her ruling in a lawsuit brought by three Nebraska landowners states that Mr. Heineman’s approval of the route — which already has been adjusted once amid environmental and water aquifer concerns in Nebraska — is now “null and void.”
It’s the latest of many setbacks for the project, which would transport more than 800,000 barrels of oil each day south from Alberta through the U.S. heartland to refineries on the Gulf Coast.
The pipeline has languished in bureaucratic limbo for the past five years and has become a political lightning rod in Washington and across the country while putting a strain on U.S.-Canadian relations.
Judge Stacy issued the ruling the same day Mr. Obama met with Canadian Prime Minister Stephen Harper in Mexico, with the Canadian leader privately pressing his American counterpart to cut through the red tape and allow Keystone to break ground immediately.
Neither Mr. Obama nor Mr. Harper directly addressed the Nebraska decision during a press conference Wednesday night.
Back at home, environmentalists applauded the ruling, while Nebraska Attorney General Jon Bruning moved quickly to appeal.
“Citizens won today. We beat a corrupt bill that Gov. Heineman and the Nebraska Legislature passed in order to pave the way for a foreign corporation to run roughshod over American landowners,” said Jane Kleeb, director of Bold Nebraska, a leading Keystone opposition group.
Mr. Heineman approved the route last year based on authority given him in a 2011 law. The legislation empowered the governor’s office to give TransCanada, the company proposing the pipeline, eminent domain rights within Nebraska.
“Under the court’s ruling, TransCanada has no approved route in Nebraska,” said Dave Domina, the lawyer representing the landowners who brought the lawsuit.
TransCanada said it will review the decision before deciding how to proceed.
“We are disappointed and disagree with the decision. We will now analyze the judgment and decide what next steps may be taken,” said company spokesman Shawn Howard. “TransCanada continues to believe strongly in Keystone XL and the benefits it would provide to Americans — thousands of jobs and a secure supply of crude oil from a trusted neighbor in Canada.”
The court’s decision will result in another delay of at least seven months, according to the NPSC. Under state law, the NPSC must make a decision on a proposed pipeline within seven months of receiving an application, said Laura Demman, director of the commission’s natural gas department.