Nebraska lawmaker wants state to have a say on Keystone

LINCOLN, Neb Tue Nov 1, 2011 11:11pm EDT

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LINCOLN, Neb (Reuters) - A Nebraska lawmaker on Tuesday proposed giving the state the authority to decide the route of oil pipelines, the latest salvo in a heated debate over a plan for a major pipeline bringing oil from Canada.

State Senator Annette Dubas offered a draft law on the first day of a special session of the Nebraska legislature considering what to do about the proposed $7 billion Keystone pipeline, which has prompted strong opposition in Nebraska.

TransCanada Corp wants the pipeline to traverse the ecologically-sensitive Nebraska Sand Hills, which sit on the Ogallala aquifer supplying water to U.S. Plains states.

Fearing an oil leak that could contaminate the water supply, opponents want the route of the pipeline moved.

"The state should have the authority to interact with these types of projects as other states have," Dubas said in presenting her proposal. "I have worked hard to address the legal concerns put forth by my colleagues,"

Her plan, and others expected to be introduced in the next few days, could put Nebraska on a collision course with TransCanada and the U.S. government.

TransCanada said it is too late to move the route of the pipeline planned to extend from the oilsands of Canada to Texas refineries. On the eve of the Nebraska session, the company also said Nebraska does not have the legal authority to decide the route, a view that some independent legal experts share.

The U.S. State Department has the ultimate authority to approve or reject the Keystone pipeline because it crosses national boundaries. Until recently a decision was expected by the end of the year. But a government official said recently that timetable could slip.

The full text of Dubas' 25-page proposal was not immediately available on Tuesday. But a two-page synopsis said: "Major oil pipeline applicants must be approved under the public interest test before they are granted eminent domain power."

The proposal said approval by the state of Nebraska should be based on:

** Compliance with applicable state statutes.

** Whether it intrudes into Nebraska land and natural resources.

** Impact on natural resources.

** Economic benefits and social impact.

** Welfare of residents along the route.

** Impact on local development and zoning.

** Views of governing bodies along the route.

** Reports from Nebraska agencies.

The proposal is expected to be referred to committee and to face public hearings in the next two weeks.

"We cannot leave here doing nothing. The citizens of Nebraska deserve more," Dubas said.

The Keystone pipeline pits promoters of energy security and job creation against those fearing environmental damage.

The project was the focus of spirited public meetings in September in Lincoln, the state capital, and in Atkinson, a rural Sand Hills town, where hundreds turned out to express opposition to a panel of State Department experts.

Only a handful of protesters showed up for the first day of the special session on Tuesday.

Troy Wentz, a farmer from Sterling, Nebraska, was on the steps of the Capitol with a sign urging federal officials to reject the pipeline. Wentz said he had just finished harvesting his soybeans, corn and popcorn crops and wanted to spend the day protecting the environment.

"Nebraska helps feed the world," Wentz said. "Why should we put our land, water and resources at risk, trading them for corporate profits?

(Editing by Greg McCune)

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