Bloomberg News

Nebraska Would Back Eastern TransCanada Path, Governor Says

November 07, 2011

(Updates with comments from Nebraska hearings in 11th paragraph.)

Nov. 7 (Bloomberg) -- TransCanada Corp. should move its planned $7 billion Keystone XL oil-pipeline project to run alongside an existing route in eastern Nebraska, away from a water aquifer, Governor David Heineman said.

“TransCanada already has a route along the eastern side of our state,” Heineman, a Republican, said in an interview today on “InBusiness with Margaret Brennan” on Bloomberg Television. “If they put this second pipeline right next to it, I’ll stand up and be supportive, so will Nebraskans and this controversy will end.”

The proposed pipeline expansion would bring 700,000 barrels of crude a day from Alberta to refineries on the U.S. Gulf Coast, cutting across six states, including Nebraska. The route of the 1,661-mile (2,673-kilometer) pipeline would cross the Ogallala aquifer, which supplies drinking water to 1.5 million people.

Nebraska lawmakers today began the second week of a special session called by Heineman to debate the state’s options for changing the pipeline’s route. There are five measures being discussed, including giving the governor the authority to change the pipeline path.

“Why would you put it over the Ogallala aquifer and risk an oil spill or an oil leak and possible contamination of our water?” Heineman asked.

Unconstitutional Re-Routing

President Barack Obama acknowledged the state’s concerns last week, saying jobs created by the project wouldn’t be worth it if drinking water supplies were at risk.

TransCanada Chief Executive Officer Russ Girling has said re-routing delays might kill the Calgary-based company’s project. Legislation to divert the Keystone XL’s current path would be unconstitutional because it would thwart interstate commerce, valuing the concerns of an individual state over broad national interests, the company has said.

“We disagree with the governor,” Terry Cunha, a TransCanada spokesman, said in an e-mail. The aquifer is not at risk and “the route that has been selected is the most environmentally responsible and has the least impact to the land the pipeline will go through.”

One measure under consideration in Nebraska would give the state’s Public Service Commission authority to approve or deny pipeline routes. If passed, the legislation would take effect immediately and apply to the Keystone XL path.

Lawmakers on the state’s eight-member Natural Resources Committee heard testimony today on the legal ramifications of legislation that would allow Nebraska to force a new pipeline path.

New Environmental Study

A new route would require federal officials to conduct another environmental impact study, Sandra Zellmer, a professor of natural resources law at the University of Nebraska-Lincoln, testified today.

That study may take six to nine months, using some of the work that went into the prior environmental report, she said. TransCanada has said a new study may take three years, the amount of time it took for the current report to be issued.

“A dirty tar-sands oil pipeline in our state water supply is irrational,” Donna Roller, a Nebraska landowner, testified. Roller owns land in York County with two irrigation wells she feared could become contaminated. “TransCanada’s refusal to move this pipeline shows a disregard for the concerns of the citizens of Nebraska.”

Reflecting Obama’s Views

The State Department, which has jurisdiction over the pipeline because it crosses an international border, has said the project will cause “no significant” environmental damage provided TransCanada complies with U.S. law and follows recommended safeguards. The department has said it expects to make its decision this year.

While the decision will be made at the State Department, the determination “will reflect the president’s views,” White House press secretary Jay Carney said today at a briefing.

In a from the White House with television station KETV, Obama acknowledged the concerns of Nebraskans and indicated he will have final say over whether to approve the pipeline.

“Folks in Nebraska, like all across the country, aren’t going to say to themselves, ‘We’ll take a few thousand jobs if it means our kids are potentially drinking water that would damage their health,’” Obama said in a Nov. 1 interview with Nebraska television station KETV.

Thousands of protesters in Washington surrounded the White House yesterday, urging Obama to reject Keystone because they said it will encourage further development of Canada’s oil sands, a production method that causes more greenhouse-gas emissions than other types of crude development.

The Nebraska Legislature will weigh other Keystone bills during the next two days. Bills that are approved by committee will be debated by the entire 49-member legislature.

--With assistance from Margaret Brennan in New York. Editors: Tina Davis, Charles Siler

To contact the reporters on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net; Bradley Olson in Lincoln, Nebraska at bradleyolson@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net


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