Bloomberg News

Nebraska Governor Calls for Session on Keystone Pipeline

October 24, 2011

(Updates with comment from environmental group in fifth paragraph.)

Oct. 24 (Bloomberg) -- Nebraska Governor Dave Heineman added another hurdle to TransCanada Corp.’s proposed Keystone XL oil pipeline by calling a special legislative session to consider ways the state may change the proposed route.

The session will be held starting Nov. 1, Heineman, a Republican, said today in an e-mailed statement. The move comes a week after the Canadian pipeline operator offered to add more safety equipment and procedures.

The $7 billion pipeline expansion, which would bring crude from Canada’s oil sands to refineries on the Gulf of Mexico coast, is awaiting a permit from U.S. Secretary of State Hillary Clinton. Heineman has urged Clinton and President Barack Obama to reject the permit, required because the line would cross the Canadian border.

Nebraska’s one-chamber legislature should hold a “thoughtful and thorough public discussion” about alternatives to the route proposed by Calgary-based TransCanada, Heineman said today in the statement. Nebraska Senator and Speaker of the Legislature Mike Flood on Oct. 19 opposed a special hearing because it would risk legal action.

“This move shows that it’s not a partisan issue,” said Anthony Swift, a policy analyst at the Natural Resources Defense Council in Washington, D.C. “The State Department has been trying to move the permitting on this as quickly as possible. Nebraska wants more evaluation.”

Water Concerns

Opposition groups, including ranchers and environmental advocates, have focused on the risks to water quality as the 1,661-mile (2,673-kilometer) pipeline traverses the Ogallala Aquifer which supplies almost a third of the water used in the U.S. for agriculture.

Proponents such as unions have highlighted a study by Texas-based Perryman Group, a financial analysis firm, commissioned by TransCanada that the project would generate $20.9 billion in new spending in the U.S. and more than $585 million in state and local taxes as well as thousands of jobs.

TransCanada responded to Governor Heineman’s move today by reiterating that the pipeline would have a minimal impact on the environment. A special session to debate the proposed route may be “very expensive to Nebraska taxpayers,” Shawn Howard, a company spokesman, said in an e-mailed response to questions.

Nebraska lawmakers had been weighing a special session to consider ways to force relocation of the line to the state’s eastern region, State Senator Ken Haar, a Democrat, said in an interview last month. The bill would have to be passed by Nebraska’s legislature before the State Department issues its decision by the end of the year, Haar said at the time.

TransCanada rose 0.5 percent to C$43.96 at the close in Toronto.

--Editors: Charles Siler, Jasmina Kelemen

To contact the reporter on this story: Jeremy van Loon in Calgary at jvanloon@bloomberg.net; Jim Polson in New York at jpolson@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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