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TransCanada To Nebraska: Altering Keystone XL Pipeline Route Would Be Unconstitutional

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KEYSTONE PIPELINE
Alex Pourbaix, president of TransCanada Corp.'s energy and oil pipelines, right, speaks to reporters in Nebraska earlier this month. Legislators in the state are considering bills that would force Pourbaix's company to reroute its planned pipeline. | AP File

In a signal of what might lie ahead in the contentious battle over the Keystone XL oil pipeline, the company behind the proposed project, Calgary-based TransCanada, suggested this week that legislative efforts underway in Nebraska to force a rerouting of the pipeline could prove unconstitutional.

The Nebraska legislature, at the urging of the state's governor, opened a special session Tuesday during which lawmakers were expected to begin introducing myriad bills designed to tweak Nebraska's pipeline siting and safety authority. For many lawmakers, the overarching goal is to force TransCanada to seek a different route for the pipeline, which as currently conceived would cut through a sensitive region known as the Sand Hills -- part of the larger, multi-state Ogallala aquifer.

In a statement late Monday, TransCanada suggested that any law passed during the special session that affects the Keystone XL project would "constitute unconstitutional discrimination against interstate commerce." Speaking on Tuesday, company spokesman Shawn Howard clarified that TransCanada was not suggesting that Nebraska had no right to govern pipelines that run within its borders, but that it was too late to do so with this project.

"We've never disputed that they could, within the rules, establish their own siting authority," Howard told The Huffington Post. "But that's for future projects. Imagine if you were building a house and you got all the approvals and the permits that you needed, and after all that, an inspector comes in and changes the rules and says you have to start all over again."

The $7 billion Keystone XL pipeline would carry crude oil some 1,700 miles from a vast oil patch in northern Alberta to refineries on the Texas Gulf Coast. Producers tapping an oil-rich formation in North Dakota and Montana would also have access to the pipeline near Baker, Mont. The State Department, which must issue a so-called "national interest" permit for the pipeline to cross the border between the United States and Canada has recently completed a prolonged environmental review of the project, and is now in the final stages of deliberations.

Environmental groups -- many opposed to development of Alberta's unconventional oil resource, sometimes called the Tar Sands, because of the inordinate amount of pollution and greenhouse gases it produces relative to conventional forms of oil -- have decried the environmental review as inadequate. They have also uncovered emails that they say reveal an inappropriately complicit relationship between State Department officials and representatives of TransCanada, a charge that both the department and the company have dismissed as unfounded.

A mass demonstration in protest of the pipeline is scheduled for Sunday, Nov. 6, in Washington, D.C., where protesters are expected to encircle the White House in an effort to convince the Obama administration to reject the pipeline permit.

The call by Nebraska's Republican Governor Dave Heineman for a special legislative session comes as debate over the pipeline appears to be reaching a crescendo. "The key decision for current pipeline discussions is the permitting decision that will be made by the Obama Administration, which is why I have urged President Obama and Secretary of State Clinton to deny the permit," Heineman said in issuing his call last week. "However, I believe Nebraskans are expecting our best efforts to determine if alternatives exist."

Legislators were scheduled to begin introducing bills at 2:00 p.m. central time. The bills are expected to address a number of aspects of Nebraska law as it relates to pipelines, including enhanced authority over siting and alterations to eminent domain rules that allow a company to override reluctant landowners who refuse to accept lease terms for pipelines that cross their property. The legislature is also expected to consider bills that will address liability questions, should a pipeline spring a leak.

The proposed pieces of legislation will ultimately be sent to the state's Natural Resource Committee for debate. Public hearings on the bills are slated to begin on Monday, and Governor Heineman has suggested that the process could extend to the Thanksgiving holiday.

Howard said the federal government has already exhaustively reviewed the project, including myriad alternative routes, and that changing the pipeline's path now would be prohibitive.

"You can't just take an eraser and erase a line on the map and say, 'Well, we'll just draw it over here,'" he said, "because you're not operating under the same environmental review. This is the only route that the pipeline is approved to follow. You can make minor variations; if during construction you run into something, you can make small adjustments. But you can't be just moving it tens or hundreds of miles."

Howard would not speculate on the company's options should the Nebraska legislature pass rules that might apply to the Keystone XL. But he pointed to earlier statements by the legislature's speaker, Mike Flood, who warned that such an outcome could result in prolonged and expensive litigation for the state.

"After careful analysis, it would be both reckless and disingenuous for me to suggest that siting legislation, if enacted in special session, would redirect the proposed route and be vindicated in court," Flood said in a prepared statement two weeks ago.

TransCanada also suggested in its statement Monday, which was informed by legal opinions the company commissioned, that any pipeline siting legislation enacted in Nebraska's special session could only be seen as "targeted exclusively at stopping or re-routing Keystone XL" and as such would be unfairly discriminatory. "We felt it was important for Nebraskans to hear from all sides in this debate," said Alex Pourbaix, TransCanada's pipelines president. "We are hopeful that this information will provide some balance and insights related to proposed draft legislation to alter the Keystone XL route."

Anthony Swift, an energy analyst and attorney with the Natural Resources Defense Council, said this was simple bullying on the part of the company. "TransCanada doesn't have authority to build a pipeline yet, so this idea that Nebraska has no right to pass legislation on a project that is still in the permitting process is a bit disingenuous," he said. "This is not just about Keystone XL, and the optics of TransCanada suing the state of Nebraska because it is trying to exercise its right to protect its citizens is not a situation that Cananda, or Alberta or even producers in the Tar Sands want to be in."

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