Monday, February 24, 2014

Keystone XL Pipeline Roundup

The Keystone XL pipeline remains in the news. Last week Nebraska judge Stephanie F. Stacy struck down a state law (LB1161) on Wednesday that allowed Governor Dave Heineman to approve the Keystone pipeline's path through the state back in January 2013.
from TransCanada

First a little background:
In November 2011, the State Department announced it was delaying its decision on the original 2008 TransCanada Keystone XL pipeline application for a Presidential Permit to cross the Canadian/United States border. That route passed through some environmentally sensitive areas of the Ogallala Aquifer, one of the largest bodies of water in the United States. Then on January 18, 2012, President Obama denied TransCanada's Presidential Permit application.

On April 18,2012, TransCanada submitted a new "Initial Report Identifying Alternative and Preferred Corridors for Nebraska Reroute" to the Nebraska Department of Environmental Quality, NDEQ, for evaluation of rerouted Keystone XL Pipeline project under the requirements of Nebraska law LB 1161 which allows pipeline carriers to seek and obtain approval of a proposed pipeline route from Nebraska's Governor, following a self-funded environmental review by NDEQ. This application for a NDEQ review of a new route was followed in May 4th 2012 by a new application to the United States Department of State for a Presidential Permit to construct and operate the Keystone XL Pipeline. The President has not yet acted on TransCanada's new application.

LB 1161 (the law that Judge Stacy struck down) was an amendment to the Major Pipeline Siting Act, MOPSA. At the time of its enactment in November 2011, MOPSA did not apply to any major oil pipeline that had submitted an application to the United States Department of State under Executive Order 13337 prior to MOPSA's effective date. The only oil pipeline to fit within this exemption was the Keystone XL Pipeline.

Under LB 1161 a pipeline carrier submits a route for evaluation by NDEQ and receives the Governor's approval instead of obtaining approval from, the Public Service Commission, PSC, under the requirements of the MOSPA. The MOSPA process includes review by the Nebraska Departments of Environmental Quality, Natural Resources, Revenue, and Roads, the Game and Parks Commission, Nebraska Oil and Gas Conservation Commission, Nebraska State Historical Society, State Fire Marshal, and Board of Educational Lands and Funds and also requires the PSC to schedule a public hearing within 60 days of receiving an application.

On January 22, 2013 Governor Heineman of Nebraska signed the recommendation to the U.S. Department of State for a Presidential Permit for the Keystone XL pipeline to cross the international border after the Nebraska DEQ recommended approval of the revised route selected (with their guidance) for the Keystone XL Pipeline. It was LB 1161 that enabled the Governor to do this.

The three Plaintiffs in this case are residents and taxpayers of the State of Nebraska. Each Plaintiff owns land or is the beneficiary of a trust holding land that was, or still is, in the path of one or more proposed pipeline routes for the Keystone XL Pipeline. The Defendants are the Governor, the Director of the Nebraska DEQ and the Nebraska State Treasurer. The Defendants argued that the Plaintiffs did not have standing to challenge LB 1161 and the district court lacks subject matter jurisdiction, and should have dismissed the case.

Siding with three plaintiffs, Judge Stacy found that under Nebraska’s State Constitution, exclusive regulatory control over pipelines like the Keystone XL must be exercised by the Nebraska Public Service Commission (PSC), and cannot be given to the Governor. Judge Stacy found LB 1161 must be declared unconstitutional and void. Though the Judge stated in her opinion that “such a declaration should not be misconstrued as an indictment of the work done by NDEQ in conducting the comprehensive evaluation required by LB 1161, or the conclusions reached by the Governor after reviewing NDEQ's Final Evaluation Report and approving the Keystone XL Pipeline route.”

Judge Stacy’s decision will probably be appealed to the Nebraska Supreme court, or the Keystone XL Pipeline route could be subjected to the review process by the PSC under MOPA. Either way this decision serves as yet one more delay to take federal action on the Keystone XL pipeline. Which is once more awaiting federal action. Presidential Permit review process is now focused on whether the Keystone XL Pipeline serves our national interest, though maybe it is focused on how long you can drag out a difficult decision.

On January 31, 2014, the U.S. Department of State released the Final Supplemental Environmental Impact Statement for the Keystone XL Pipeline. The executive summary states that Keystone XL is “unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refineries in the United States based on expected oil prices, oil-sands supply costs, transport costs and supply-demand scenarios.” In other words, no matter what action the Administration chooses to take on this portion of the pipeline-approve, reject, or stall- the oil sands are not staying in the ground in Canada. There is world demand for heavy crude oil and it will be met. The Texas refineries are optimized for heavy crude either from South America or Canada. The crude oil will come by pipeline, boat, truck or rail road. As Marcia McNutt, the editor in chief of the AAAS journal Science stated in a recent editorial moving the Canadian crude by pipeline is the least environmentally damaging and safest method of transporting oil.

The Department of State opened a 30 day comment period on February 5, 2014 where members of the public and other interested parties can submit comments on the Keystone XL Pipeline. Though Secretary Kerry is empowered to make the final decision, the next step will have input from the White House. 

No comments:

Post a Comment