Keystone pipeline alternative route approved by Nebraska commission

LINCOLN, Neb. -- A Nebraska commission approved an alternative route for the Keystone XL oil pipeline through the state on Monday, removing the last major regulatory obstacle to building the long-delayed $8 billion project.

The Nebraska Public Service Commission's vote on the long-delayed project could still be challenged in court. Opponents also said another federal review may be needed because the approved route would run farther north than the preferred route proposed by TransCanada Corp., which wants to build a 1,179-mile pipeline from Canada across several U.S. states.

"This decision opens up a whole new bag of issues that we can raise," said Ken Winston, an attorney representing environmental groups that have long opposed the project.

Still, the commission's 3-2 vote likely clears the way for the company to gain access to the property of holdout landowners in Nebraska who vehemently oppose the pipeline, using the state's eminent domain laws. More than 90 percent of Nebraska landowners along the route have agreed to let TransCanada bury the pipeline beneath their property, but those who oppose it have managed to thwart the project for years.

The pipeline also faces intense opposition from Native American tribes, but business groups and some unions support the project as a way to create jobs and reduce the risk of shipping the oil by trains that can derail.

President Trump issued a federal permit allowing for the project in March, reversing President Obama administration's rejection of it. TransCanada had said that it would announce in late November or early December whether it planned to proceed with building the pipeline, taking into account the Nebraska decision and whether it has lined up enough long-term contracts to ship oil.

Jane Kleeb, director of the pipeline opposition group the Bold Alliance, said her group believes TransCanada will have to seek another federal review of the route, a process that would add even more years to the timetable. The mainline alternative approved Monday includes 63 miles of new pipeline that hasn't been reviewed by the federal government.

Opponents are expected to appeal the Nebraska commission's decision in a state district court, and the case is likely to end up before the Nebraska Supreme Court. The commission was forbidden by law from considering a recent oil spill in South Dakota on the existing Keystone pipeline in its decision.

The proposed Keystone XL route would expand the existing Keystone pipeline, which went into service in July 2010. The current pipeline network runs south through North Dakota, South Dakota, Nebraska, Kansas, Oklahoma and Texas and extends east into Missouri and Illinois.

The new pipeline would carry an estimated 830,000 barrels of oil a day from the oil sands areas of Canada through Montana, South Dakota and Nebraska, where it would connect with the existing Keystone pipeline. The pipeline would then continue through Kansas, Oklahoma and Texas to the coast.

TransCanada has said its route through Nebraska is the most direct way to transport oil from Alberta, Canada, to an existing pipeline in Steele City, Nebraska.

The commission's decision was based on evidence presented at a public hearing in August. The elected commission is composed of four Republicans and one Democrat.