Under LB 1161 a pipeline carrier submits a route for evaluation by the Nebraska DEQ and receives the Governor's approval instead of obtaining approval from, the Public Service Commission, PSC, under the requirements of an older law called the Major Pipeline Siting Act (MOSPA) that was actually went into effect after the Keystone XL Pipeline application was submitted to the United States Department of State. The newer law LB 1161 was an amendment to MOPSA to exempt 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.
The MOSPA process includes review by the Nebraska DEQ, Department of Natural Resources, Department of Revenue, and Department of 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. LB 1161 allowed the Keystone XL project to shorten this process for their revised route.
A Judge in a lower court had found that under the 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, and that 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.”
The three Plaintiffs in the 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 were 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. The Nebraska Supreme Court had three of the panel judges conclude the landowners did not have legal standing to bring the lawsuit. As a result, they declined to address the larger constitutional question. Though four of the judges concluded the routing law “violates fundamental constitutional limits on government power in Nebraska,” a supermajority of five judges is required to declare a law unconstitutional and the law stands.
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 (paid for by TransCanada) of new route for the Keystone XL Pipeline project under the requirements of LB 1161. 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.
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.
The Department of State opened a 30 day comment period on February 5, 2014 then in April the administration announced that they would be delaying the decision until after the Nebraska Supreme Court decided the case. There has never been a timeline for making a decision, but the time has come to fish or cut bait. Secretary Kerry is empowered to make the final decision, though the White House has always controlled the process and now will be forced to make a decision because congress is taking action. Now a bill that authorizes the Keystone XL pipeline to cross the international boarder has passed the U.S. House of representatives 266-153 and is headed to the U.S. Senate where it is expected to pass, but does not have the majority necessary to override a Presidential veto. The bill should arrive on the President’s desk next week.
Though the President will veto the bill, it is just a pipeline, the crude oil is not staying in the ground it 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. There is currently a pipeline Keystone I that runs east from Hardesty Saskatchewan to Manitoba and then south through the Dakotas to Steel City, Nebraska. It is a less direct route and is a lower volume pipeline. Keystone II runs from Steel City to Cushing, Oklahoma at the Oklahoma storage facilities. Keystone III running from the Cushing Oklahoma to the Nederland, Texas began delivering crude oil from Cushing, OK, to the oil refineries in Texas on Wednesday, January 22, 2014. The Gulf Coast Project, Keystone III, did not require a Presidential Permit because it does not cross an international border.