A Nebraska judge on Wednesday struck down a law that allowed the Keystone XL pipeline to proceed through the state, a victory for opponents who have tried to block the project that would carry oil from Canada to Texas refineries.
Lancaster County Judge Stephanie Stacy issued a ruling that invalidated Gov. Dave Heineman's approval of the route. Stacy agreed with opponents' arguments that the law passed in 2012 improperly allowed Heineman to give Calgary-based TransCanada Corp. the power to force landowners to sell their property for the project. Stacy said the decision to give TransCanada eminent domain powers should have been made by the Nebraska Public Service Commission, which regulates pipelines and other utilities. A spokeswoman for Attorney General Jon Bruning said the state will appeal.
Stacy's decision could cause more delays in finishing the pipeline, which is critical in Canada's efforts to export its growing oil sands production. It also comes amid increased concerns about the dangers of using trains to transport crude oil after some high-profile accidents — including a fiery explosion in North Dakota last month and an explosion that killed 47 people in Canada last year.
A spokesman for pipeline developer TransCanada said company officials were disappointed and disagreed with the decision, which came in a lawsuit filed by three Nebraska landowners who oppose the pipeline. "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," Shawn Howard said.
Foes say the pipeline would carry "dirty oil" that contributes to global warming and are also concerned about a possible spill.
The proposed route would cross through Montana, South Dakota, Kansas, Oklahoma and Texas, which have approved their segments, and company officials have argued that cutting through Nebraska was the most direct, practical way to transport the oil. A reroute around Nebraska could bring more states into the mix and would lead to further expensive delays.
For the Public Service Commission to act, Nebraska lawmakers may have to pass a new pipeline-sitting law. If they do, it's not clear how long the five-member PSC, which was created in the 1890s to prevent governors from granting political favors to railroad executives who wanted to expand through private property, might take on the issue or whether it would approve the pipeline. Staff members were reviewing the ruling, said Angela Melton, the commission's attorney.
Dave Domina, the landowners' attorney, said in a statement that the ruling means TransCanada has "no approved route in Nebraska."
"TransCanada is not authorized to condemn the property against Nebraska landowners. The pipeline project is at standstill in this state," he said.
The Keystone XL would carry 830,000 barrels daily from Canada to Texas Gulf Coast refineries. In its latest environmental analysis, the U.S. State Department raised no major environmental objections to the $7 billion pipeline. Opponents disagree, saying the pipeline threatens ground and surface water and would disrupt soil in the Nebraska Sandhills, a region of grass-covered dunes used as ranchland.
The Legislature gave Heineman the ability to approve the route after landowners complained the pipeline posed a threat to the Sandhills. He approved a new route that went around an area designated as the Sandhills, although opponents insist it still traverses the delicate soil.