TransCanada pipeline threatened by Nebraska re-routing plan

HOUSTON — TransCanada's Keystone XL pipeline may be threatened by legislation in Nebraska that would re-route the $7 billion project designed to bring Canadian crude to refineries on the Gulf of Mexico.

At a special session on Nov. 1, Nebraskan lawmakers will consider a bill aimed at forcing Calgary-based TransCanada to move the pipeline to the state's eastern edge, a step that company officials said may put the project in jeopardy.

The other five states the pipeline would traverse — Montana, South Dakota, Kansas, Oklahoma and Texas — have either approved the route or have leaders who have expressed support for it.

Ranchers in Nebraska and environmentalists have raised concerns that the pipeline's path in the state across a freshwater aquifer and marshy terrain pose unacceptable risks in the event of an oil spill. The state's governor and both U.S. senators oppose the project's route.

"There will be a greater-than-normal pressure from the public to do something that moves the pipeline," Chris Langemeier, a senator who heads the committee that will weigh any bills proposed in the session, said in an interview Tuesday.

A move to change the route may not withstand a court challenge, Speaker of the Legislature Mike Flood said in an Oct. 19 letter to colleagues. Flood also cast doubt on whether a law giving the state authority over pipeline routes would be able to force TransCanada to change the path of the Keystone XL.

Flood said in the letter that he doesn't support the move because it could delay the project by 16 months.

An interruption of that length could kill the 1,661-mile pipeline, said Mark Lewis, a specialist in pipeline law at Bracewell & Giuliani in Washington.

"Sometimes, these projects just get delayed to death," Lewis said in an interview. "If the legislation is eventually reversed by a court, it may be a hollow victory for TransCanada. The risk of delay from the legislation is very serious."

A delay could put the pipeline project in doubt, Shawn Howard, a TransCanada spokesman, said. The company can't move the route legally, he said.

"You can't ask us to change the route and act like it's just changing an order on a menu," Howard said in a telephone interview Tuesday. "A new route would start the entire process right from the beginning. This is what professional activists who have been opposing Keystone want. They want to delay, to tie it up through legal means."

More than 1,200 activists were arrested in protests against the pipeline at the White House. Many of the protesters criticized the process of Canadian crude extraction, which causes greater greenhouse-gas emissions than most other types of oil production.

The State Department, which has authority over the pipeline because it crosses an international border, found in an environmental impact study in August that the line would cause "no significant impacts to most resources." The State Department has indicated it expects to decide on whether to grant a permit for the pipeline by the end of the year, although a final decision could revert to President Barack Obama.

The other five states the pipeline would traverse — Montana, South Dakota, Kansas, Oklahoma and Texas — have either approved the route or have leaders who have expressed support for it.