Challenges remain for pipeline shift

• Oil

With Sen. Ken Schilz listening at left, Sen. Mark Christensen, second left, questions Ken Winston, with the Sierra Club, second right, Tuesday during a Natural Resources Committee hearing in the State Capitol in Lincoln, Neb.

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LINCOLN, Neb. — An energy company’s agreement to shift an oil pipeline away from the environmentally sensitive Sandhills will help avoid several possible legal conflicts over Nebraska’s authority to reroute it, but significant issues still must be resolved about how much power the state will have over the new path.

Pipeline operator TransCanada has pledged that Nebraska will play a “key role” in deciding on a revised route for the $7 billion, 1,700-mile project within its borders. But if they fail to agree on a precise path, the dispute could bounce back to the U.S. State Department, a spokesman for the state’s environmental regulator said Tuesday.

TransCanada has committed to undergo a state environmental review expected to move the Keystone XL pipeline out of the Sandhills region and away from the Ogallala aquifer. Exact details of the review, such as a timeline and cost, have not yet been calculated, said Department of Environmental Quality spokesman Brian McManus.

But McManus stressed the talks between state officials and the company would be a “collaborative effort,” with both sides pushing to reach an agreement — though he acknowledged the state’s exact role had not yet been determined.

Debate over the pipeline has drawn international attention focused largely on Nebraska, because the pipeline was expected to cross the Sandhills — an expanse of grass-strewn, loose-soil hills — and part of the aquifer, which supplies water to Nebraska and parts of seven other states. But national environmental groups have said they will actively fight the project along any route, because of potential environmental threats.

Company officials had claimed that moving the route was impossible because of a U.S. State Department study which found the Sandhills route would leave the smallest environmental footprint.

But last week the federal government delayed a decision on a federal permit for the project until it studies new potential routes that avoid the Sandhills area and the aquifer. The proposed pipeline would carry crude oil from Canada to Texas Gulf Coast refineries.

Nebraska Gov. Dave Heineman had called a special legislative session to seek a legal and constitutional solution to the pipeline debate, even though the state has no authority to regulate pipelines based on safety concerns. The State Department has said Nebraska can conduct its own environmental assessment of the project and work with Calgary-based TransCanada. A state proposal requiring such a review faced criticism Tuesday because it would use state tax dollars.

Speaker of the Legislature Mike Flood said his proposal to have Nebraska pay for the assessment came from concerned landowners and other pipeline opponents, who have questioned the State Department’s objectivity in the review process. The State Department had hired a Houston-based environmental consultant, Cardno ENTRIX, to prepare its environmental impact study for the Keystone XL despite the company’s financial ties to TransCanada.

“If you pay for it, you know you’re getting it done objectively,” Flood said. “What I put forward in this was, we’ll pay for it because it’s our people, our land, our drinking water.”

Robert Jones, a TransCanada executive in charge of pipelines, expressed confidence Tuesday that the company could reach an agreement with the state but gave no details about the state’s exact role. He said the State Department’s decision to delay its decision until 2013 has “provided us an opportunity to revisit the route.”

Some environmental groups have said they’ll continue their efforts to halt the project.

“They want to stop all pipelines, and we are in disagreement with them,” said Heineman, a Republican, who supports the project but opposed its route.

Heineman said the Department of Environmental Quality needed more time to calculate the exact cost of a state assessment, which could include hiring a consultant.

Montana has had routing authority over major oil lines since 1973 and worked with TransCanada for the 285-mile portion of the Keystone XL that will pass through the state, said Greg Hallsten, the state’s environmental coordinator. Unlike Nebraska’s proposal, he said, pipeline companies pay for their own state environmental review.

And though pipeline routes crossing the border from Canada still require State Department approval, Hallsten said federal officials have supported Montana’s efforts to address local concerns. He said Montana has proposed minor changes along 117 miles of the route, and can reroute lines to preserve environmental amenities, social amenities such as farm fields and other areas of concern.

“It’s not something big, like going around the Sandhills,” Hallsten said. “But it isn’t what TransCanada wanted.”

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