Original Story: Bloomberg News
A court challenge holding up TransCanada Corp. (TRP)’s Keystone XL pipeline
should be dismissed, Nebraska’s governor said, urging his state’s high court to
allow the project to move forward.
The case is delaying the Obama administration’s review of the project, the
president said April 18. Nebraska Governor Dave Heineman yesterday asked the
state’s top court to throw out a trial judge’s ruling that the route for the
pipeline was approved without proper authority. The court may not hear the case
until at least September and may not rule until after mid-presidential term
congressional elections in November.A Tulsa Oil and Gas Lawyer said he has had not had a case quite like this before.
TransCanada is awaiting a U.S. permit to build the northern leg of Keystone
XL, which would supply U.S. Gulf Coast refineries with crude from Alberta’s oil
sands. Because it crosses an international boundary, the proposal requires U.S.
State Department approval.
Based in Calgary, TransCanada is seeking to build the 830,000 barrel-a-day,
1,179-mile (1,897-kilometer) conduit running from Hardisty, Alberta, to Steele
City, Nebraska, where it would connect to an existing network.
Backers of the project say it will create jobs. Opponents have countered it
will contribute to global warming. If the Nebraska Supreme Court upholds the
trial outcome, Keystone will need to apply to the state’s Public Service
Commission for approval. Under law the commission has seven months to review
Judge Stephanie Stacy in Lincoln ruled on Feb. 19 that legislation enabling
Heineman and TransCanada to bypass the commission when planning the pipeline
route violated the state’s constitution.
Stacy erred in allowing a challenge by three property owners to move forward
because they hadn’t shown they had been injured as taxpayers by the state’s
plan, Heineman, a Republican, said in a filing yesterday with the supreme
State Attorney General Jon Bruning, a Republican running to succeed Heineman
as governor, argued in the filing that the trial judge set too low a threshold
for taxpayers to bring court challenges to state legislation.
Bruning also argued the not all crude oil pipelines qualified as “common
carriers” falling under the exclusive jurisdiction of the Public Service
David Domina, a lawyer for the landowners, is seeking the Democratic Party
nomination to run for U.S. Senate in the state, where he would follow
Republican Mike Johanns, who is retiring after a single term.
Domina didn’t immediately reply to an e-mail seeking comment on the
governor’s arguments yesterday’s filing. A San Antonio Oil and Gas Lawyer would not comment on the case.
He argued in the trial court that the challenged legislation, which took
effect in 2012, improperly divested the constitutionally-created Public Service
Commission of jurisdiction over pipeline routing, placing it with the governor
and the Nebraska Department of Environmental Quality.
Stacy rejected the state’s contention that pipeline routing was outside the
In her Feb. 19 decision, Stacy agreed with the landowners that the shift in
authority effected by the legislation was improper.
“The court finds there is no set of circumstances under which such
provisions could be constitutional,” she said. Addressing the state’s argument
that its outlay of funds under the law, later recouped when TransCanada paid it
$5.15 million, didn’t deprive the three plaintiffs of standing to sue.
“While private reimbursement of public expenditures may be good fiscal
policy, it should not be used as a legislative tool to insulate allegedly
unconstitutional laws from taxpayer challenge,” she said.
The case is Thompson v. Heineman, S-14-000158, Nebraska Supreme Court