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.
Now that the law has been struck down, Mr. Heineman’s approval is moot and the process must start again, this time to be overseen by the NPSC.
“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.
Extensions of the approval process are possible, she said, meaning it could drag on for a year or longer. The NPSC essentially is starting from scratch, having done no work on the pipeline up to this point.
“We have not been involved in any way,” Ms. Demman said.
Meanwhile, the federal government is moving ahead with its own separate approval process. The State Department recently concluded its final “environmental impact study” of the pipeline and concluded that the project would have no real effect on U.S. greenhouse gas emissions.
Mr. Obama, who must approve Keystone because it crosses an international boundary, previously has said he would sign off on the project only if it wouldn’t increase harmful emissions and subsequently accelerate climate change. The State Department report also found that the project would create more than 40,000 jobs.
Asked about the State Department findings Wednesday night, Mr. Obama followed his usual tack and deferred to the ongoing federal process but said nothing more.
“There is a process that has been gone through and I know it’s been extensive — and at times I’m sure [Mr. Harper] feels a little too laborious — but these [reviews] are how we make these decisions about something that could potentially have significant impact on America’s national economy and national interest,” the president said before quickly moving to the broader issue of climate change.
Mr. Harper, meanwhile, touted the State Department report and also said Canada has procedures in place to make relatively fast decisions on such projects.
“My views in favor of the project are very well known. [Mr. Obama’s] views on the process are also equally well known and we had that discussion and we’ll continue on that discussion,” he said.
Like Mr. Harper, Keystone supporters, including a broad, bipartisan coalition in Congress along with business and labor groups, used the report to again call on Mr. Obama to stop stalling and approve the project immediately.
The review now is in a public comment period, after which the State Department will offer a final recommendation of whether the pipeline is in the “national interest,” an equation that includes not only climate change concerns, but also weighs the economic benefits of the project and the national security implications of getting fuel from friendly Canada rather than the Middle East.
Following that determination, Mr. Obama would have made a final decision, possibly in the spring or summer. It’s unclear when his decision will come in light of Wednesday’s ruling.
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