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Nebraska court clears pipeline route as showdown looms in Washington
January 9, 2015 / 2:38 PM / 3 years ago

Nebraska court clears pipeline route as showdown looms in Washington

A depot used to store pipes for Transcanada Corp's planned Keystone XL oil pipeline is seen in Gascoyne, North Dakota, in this file photo taken November 14, 2014. REUTERS/Andrew Cullen/Files

WASHINGTON (Reuters) - The Nebraska Supreme Court on Friday removed one of the last hurdles for President Barack Obama to settle the fate of the politically charged Keystone XL oil pipeline, delivering a closely watched decision on an issue that could help define his second term.

After months of deliberation, the court allowed a route for the pipeline to cross the state, shifting the debate over TransCanada Corp’s controversial line fully to Washington, where Republicans now in control of Congress are seeking to force its final approval after more than six years of acrimony with the White House.

A White House officials said on Friday that Obama would reject legislation that tries to push the project ahead.

“If presented to the president, he will veto,” spokesman Eric Schultz said in a statement.

The Nebraska ruling came hours before the U.S. House of Representatives planned to vote on legislation approving the pipeline, which would help carry up to 830,000 barrels of oil per day from Canada’s oil sands to Gulf Coast refineries.

The Senate is expected to take up a Keystone bill for debate next week.

In Nebraska, the legal question narrowly focused on whether the governor had a right to bless a pipeline route, but the state supreme court has had the matter since February and the 64-page ruling reflects how contentious it has become.

The court said it could not decide whether legislation backed by former governor Dave Heineman wrongly gave him authority to grant TransCanada a pipeline route in 2012. But the court was deadlocked, which amounted to ruling in the company’s favor.

“(B)ecause there are not five judges of this court voting on the constitutionality of (the legislation), the legislation must stand by default,” the seven-judge panel said in its ruling.

The pipeline debate has energized environmentalists who see it as an emblem of fossil fuel dependence and energy interests who see a Canada-to-Texas pipeline system as a tool to spur energy production in North America.

The president has said he could not endorse a project that meaningfully worsens climate change and the issue could become one of the more controversial of his second term.

But Congress may yet settle the matter if Republicans can surmount an Obama veto or attach a Keystone provision to must-pass legislation.

“It’s time to start building,” Speaker of the House John Boehner said in a statement.

STATE DEPARTMENT

The court’s ruling allows the U.S. State Department to decide whether the pipeline meant to carry Canadian oil sands fuel would be in the national interest, a necessary step for the cross-border energy project.

Environmentalists oppose Keystone since it could help expand oil sands development.

Officials had said they could not test whether the project is in the national interest before the Nebraska Supreme Court ruled. Friday’s decision cleared the way.

Three judges said they believed the landowners who initially challenged the legislation did not do so properly, and declined to offer an opinion on whether it was constitutional.

The other four judges said they believed the law, which allowed the governor to bypass regulatory procedures and approve the route himself, was unconstitutional. But the court said it required five judges to agree in order to rule on whether a legislative enactment was constitutional, and left the law in place by default.

Anti-Keystone activists in Nebraska said on Friday they pinned their hopes on the White House to reject the project.

“While the outcome may not be what we had hoped for, I believe we have successfully sent the message that Nebraska citizens are willing to stand up,” said Randy Thompson, a landowner plaintiff who said he expected Obama would reject Keystone.

(This version of the story fixes a typo in paragraph 12.)

Timothy Gardner, Jeff Mason and Amanda Becker in Washington contributed; Editing by Alden Bentley

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