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The Associated Press October 18, 2011, 7:32PM ET

New safeguards proposed for Keystone XL in Neb.

A pipeline operator that wants to run a controversial oil line from Canada to Texas offered new safeguards Tuesday it said would limit the effect of a potential spill in Nebraska.

But a TransCanada executive maintained that the company cannot move its proposed route through the Nebraska Sandhills, despite opposition from environmentalists, some lawmakers and landowners, and the governor.

Canadian pipeline operator TransCanada delivered the letter to Speaker of the Legislature Mike Flood and three other lawmakers to address concerns that were raised during a closed-door meeting with company executives last week. Critics in the Legislature are trying to convene a special session for siting legislation to move the proposed Keystone XL route away from the Ogallala aquifer, a vast supply of drinking and irrigation water.

Alex Pourbaix, TransCanada's president of Energy and Oil Pipelines, said the company cannot move the pipeline at this point in the federal permitting process. The company applied for a presidential permit in 2008 so the line could cross the U.S.-Canadian border.

Pourbaix said the company is now willing to provide and maintain a $100 million performance bond for the state if TransCanada fails to clean up a spill in the Sandhills. The company said it would build a concrete containment around a pump station in Holt County to keep oil and water from mixing.

The company also offered to locate oil spill response equipment and personnel in the Sandhills region, which it said would reduce spill response time to less than two hours. Federal rules require a maximum 12-hour response times.

Pourbaix said TransCanada would install a concrete coating, rock jacket or other protective materials that would encircle a 35-mile stretch of pipeline in the Sandhills, where the water table is at or near the surface. He said the company would also conduct water-well testing for nearby landowners, and provide an alternative water supply if water quality was compromised.

The company said it would pay a public liaison officer to "facilitate the exchange of information" between TransCanada employees, its contractors, and residents. The liaison would report to the Nebraska Department of Environmental Quality.

Pipeline opponents worry that the pipeline would leak and contaminate the groundwater supply, and have raised concerns about the line's impact on wildlife. Gov. Dave Heineman has declined to call a special session, saying that rerouting the line lacks support in the Legislature and would waste tax money. He also has questioned the state's authority to relocate the pipeline.

Opponents said the letter was disingenuous. State Sen. Ken Haar of Malcolm, a prominent pipeline critic, said the letter still failed to address his concerns about spill risks, and landowners who say the company strong-armed them into signing right-of-way agreements to make way for the pipeline. Haar is pushing for lawmakers to call themselves into special session, which has never been done in state history.

"Did we really have to go through all this work to get these concessions?" Haar said. "Are they agreeing that the pipeline has to be safer? Why did they fight us during the regular session, and now they're willing to give these kind of concessions? It really begs the question: Why don't they just move it away from the Sandhills?"

TransCanada executives have maintained that the pipeline is safe, and said their meeting with lawmakers was intended to address lingering concerns.

Haar said the $100 million bond the company offered pales when compared to the cost of recent large-scale accidents, such as the 2010 oil spill into the Kalamazoo River in Michigan. The Michigan cleanup costs are expected to reach $700 million.

Haar said lawmakers might still need a special session to ensure compliance with the company's offer.

Through a spokesman, Flood declined to comment on the letter.

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