Debate continues over Keystone XL pipeline

Jun 21, 2012

Oklahoma’s governor criticized President Barack Obama last week for holding up a Keystone XL Pipeline that she said will greatly benefit her state.

During a two-day visit to the Global Petroleum Show in Canada, Oklahoma Republican Gov. Mary Fallin said the president is ignoring the importance of the oil industry to the U.S. and states like hers.

“The president doesn’t understand the magnitude of the energy sector and how it can generate strength in the economy,” Fallin said.

Obama turned down approval of the pipeline between the Canadian border and a terminus at Cushing, in northeastern Oklahoma, because of environmental concerns.

The White House backed Trans- Canada’s proposal to build the southern half, from Cushing, OK, to the Texas coast, as a separate project.

Fallin said she believes Obama will eventually approve the northern section, possibly within the year, adding the project would create 14,000 jobs in her state alone, though many would be temporary and in construction.

Though pipeline opponents contend the oilsands crude reaching the coast would simply be exported elsewhere, Fallin insisted Keystone XL would be vital in achieving U.S. energy supply security.

“I’d much rather be able to purchase oil from an ally like Canada than from a hostile country,” she said.

“In the future, I do think it’s important that whoever our president is in the United States will be able to stand up to political pressure, be able to finalize the production of the Keystone XL pipeline from Canada down throughout the United States, because I believe it’s important for our economic security and it’s important for our national security,” said Fallin.

While Fallin believes the majority of her state supports the pipeline, a neighboring state has a few more concerns.

In Nebraska, the Keystone XL Pipeline evaluation is still in process. The Nebraska Department of Environmental Quality is conducting the review of the portion of the route through Nebraska that TransCanada had changed from its previous application, to avoid the Sandhills regions of the state.

Over 700 people attended meetings in May relating to the pipeline and its new route.

“In order for this project to become a reality, it must meet two Nebraska tests. First, the proposed route has to stay out of the Sandhills, as has been defined by state and federal agencies. Second, TransCanada must complete the state’s evaluation process. This evaluation process will be done thoroughly, objectively, and with continued public input and involvement,” said Dave Heineman, governor of Nebraska.

In late May, the Nebraska Supreme Court refused to hear a direct challenge to the state’s new pipeline siting law from pipeline opponents.

The lawsuit filed May 23 by three Nebraska landowners along TransCanada’s proposed pipeline route argues that the law outlining the review process is unconstitutional. The pipeline opponents say the law doesn’t allow for judicial review and doesn’t spell out what criteria should be considered when a proposed pipeline is being evaluated.

Under Nebraska law, TransCanada’s Keystone XL pipeline may be approved only through a specially made commission.

The lawsuit alleges that LB 1161, which was signed by Heineman in April, grants the governor the power to approve the project by his own authority. According to the lawsuit, concerns arise over the power of authority.

The construction of the pipeline could require using eminent domain to take land on which the pipeline can be built if a lease cannot be negotiated from landowners.

According to Nebraska law, only the state legislature can wield the power of eminent domain when dealing with a common carrier, and cannot delegate that duty to the governor. When the legislature does delegate powers, it usually does so with directives on how that power should be used to ensure standards are maintained. Potentially, the governor could approve the pipeline without the okay from the president.

If so, TransCanada could seize land from Nebraska property owners under the authority of eminent domain, without even being sure it will have the presidential permit needed to build the pipeline over the U.S.-Canada border.

The project has been an ongoing topic on both Capitol Hill and state capitols across the Midwest. Republicans have voted to approve the project five times. Each time, the move has been blocked in the Democraticmajority Senate.

But as the debate across the Midwestern states goes on, Canada is looking for alternatives. The Canadian company, along with the Canada government, are seeking alternatives to get the country’s nearly 200 billion barrels in oil reserves— almost equal to that of Saudi Arabia—to market from landlocked Alberta.

According to Canadian news sources, Canada is working to streamline their process, accelerate scheduled hearings, and limit public input. There is also discussion of the government threatening to revoke charitable status of environmental groups that challenge the projects.

After Obama refused to grant a permit for Keystone XL in January, Stephen Harper, Canada’s prime minister, expressed his frustration with U.S. politics, saying that some Americans saw his country as “one giant national park.” He said Canada would redirect oil that had been destined for Gulf Coast refineries to other countries, particularly China. There are currently three alternate pipeline proposals on the table in Canada.

TransCanada’s proposed Keystone XL project is designed to carry oil from Canada across Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas, with a link to Montana and North Dakota oil fields. — Traci Eatherton, WLJ Editor