Keystone XL law was controversial from the start

By Deena Winter | Nebraska Watchdog

LINCOLN, Neb. – The pipeline siting law that a Nebraska judge struck down Wednesday was hastily assembled on the floor of the Legislature in the waning days of the 2012 session in what pipeline opponents have long derided as an end run around the public.

The law deemed unconstitutional by a district judge gave Nebraska’s governor the ultimate authority to approve an oil pipeline route through the state. The state constitution gives that regulatory authority to the state Public Service Commission. The state is appealing the ruling to the Nebraska Supreme Court.

The law, called LB1161, has been a thorn in the side of Nebraska pipeline fighters since it sailed through the Legislature in April 2012 by a final vote of 44-5. The bill was originally introduced as a placeholder by Sen. Jim Smith, R-Papillion, after the Obama administration rejected TransCanada’s initial route for the Keystone XL pipeline to carry oil from Alberta, Canada, to the Gulf Coast.

The bill allowed the state to proceed with a $2 million study of a new route through Nebraska that would avoid the ecologically fragile Sandhills, with TransCanada footing the bill. It also shifted pipeline approval from independently elected public service commissioners to a state department under the governor’s control, the state Department of Environmental Quality, but gave the governor final say over the pipeline route.

Pipeline opponents cried foul because the bulk of the bill was crafted on the floor of the Legislature, after the public hearing was over, and passed with a mere 15 minutes of floor debate.

The anti-pipeline group Bold Nebraska said the law rolled back many of the provisions in two bills passed during a 2011 special session convened to deal with Keystone XL after the Obama administration rejected its original route. Under intense public pressure and full media attention, during the special session lawmakers brokered a deal with TransCanada to reroute the pipeline around the Sandhills.

But in the final days of the 2012 session, lawmakers shifted key decision-making power from the PSC to the DEQ. Bold Nebraska protested, saying the legislation gave the governor the authority to allow TransCanada to take people’s land for the pipeline through condemnation, or what’s technically called eminent domain, before the company got its federal permit.

And Smith had implied the bill would protect against lawsuits, the state got sued anyway. Three landowners associated with Bold Nebraska sued the state, saying critical steps and transparency provisions were wiped away by Smith’s bill.

At the time, a handful of lawmakers, such as Sen. Danielle Conrad, D-Lincoln, blasted lawmakers for making substantive changes to the bill on the floor rather than sending it back to committee for public input.

But Smith defended the law, saying it was in line with what lawmakers heard from citizens. Smith has since been increasingly excoriated by pipeline opponents for having a cozy relationship with TransCanada and accepting an all-expense paid trip to tour tar sands oilfield operations in Canada.

Smith said in an interview it’s not true that TransCanada wrote the bill.

“No one handed me a bill,” he said. “That’s not the way it works.”

Smith said most lawmakers voted for the bill, including “a number of pretty smart, sharp attorneys” like Omaha senators Steve Lathrop and Brad Ashford.

“If you look at it, out of the 49 senators, 43 of my colleagues joined me in supporting the bill,” Smith said.

Keystone XL stirs emotions, he said, and some opponents will do anything to stop the project.

“All along the way there’s been public input, public input, public input,” Smith said.

He said his bill was needed because prior to the 2011 special session, the statute had a gap in siting authority for major oil pipelines, and the two bills that came out of the 2011 special session divided that authority by date. But once the Obama administration rejected the permit, the law requiring DEQ to work with the U.S. State Department didn’t work. So LB1161 decoupled from the State Department so the state could restart the process.

“It was more an element of readiness because by their own admission, the PSC did not have rules and regulations for siting authority in place,” Smith said.

He doesn’t see a need for further legislation at this point, and the deadline for introducing bill has passed already.

“I think it creates uncertainty but I’m not taking this as necessarily the end of the discussion even on that bill,” he said. “There’s the appeals process and we need to let that play out.”

Contact Deena Winter at deena@nebraskawatchdog.org. Follow Deena on Twitter at @DeenaNEWatchdog

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