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States Have Ultimate Say on Keystone Pipeline's Route, Federal Memo Suggests

Advocates say a federal memo that surfaced this week proves that states have the authority to regulate or reroute the controversial oil sands pipeline

Apr 1, 2011
oil pipeline

WASHINGTON—For close to a year, Nebraska activists have hounded their state elected officials to act on behalf of constituents feeling threatened by a Canadian company's proposal to construct a controversial tar sands oil pipeline.

But most state legislators have repeatedly shooed them away, claiming they have no such authority to regulate or route oil pipelines in the Cornhusker State. That task, they repeatedly insist, is up to Congress and other federal authorities.

Now, however, the advocates claim they have received solid proof — in the form of a six-page memo from the Congressional Research Service — revealing that the governor, the attorney general and state legislators do indeed have that power.

Advocates are convinced the federal document, which "surfaced" at the Nebraska Statehouse six months after it was written, proves that state authorities could be taking the initiative to protect residents' property rights and ensure that an oil pipeline doesn't harm ecologically sensitive landscapes, the economy or the public's health.

Jane Kleeb is director of the advocacy coalition Bold Nebraska, which has spearheaded a grassroots effort to halt a new $7 billion pipeline. At issue is Keystone XL, a 1,702-mile pipeline that Calgary-based TransCanada wants to construct from tar sands mines in its home province of Alberta to oil refineries along the Gulf of Mexico.

It has the potential to double — or perhaps triple — the amount of diluted bitumen flowing to this country from its northern neighbor at a time when the issue of energy security has become a matter of national focus. Between 2000 and 2010, U.S. imports of oil sands crude grew five-fold from 100,000 to 500,000 barrels per day. That number could balloon to 1.5 million barrels per day by 2019.

"Our message to them is crystal clear," Kleeb told SolveClimate News in an interview. "They have no more wiggle room. We have a federal memo saying that this is the state's responsibility; essentially it's their duty. We are hoping they now start to take their roles and responsibilities seriously. For them to turn their back on landowners is shameful."

How the Memo Came to Light

Ken Winston, policy director with the Nebraska Sierra Club, told SolveClimate News a senator's staffer handed him the memo March 22 when he was making his regular rounds at the statehouse.

"I was shocked when I found it was dated last fall," Winston told reporters during a Wednesday teleconference organized in Lincoln, Neb., by a handful of advocacy groups. "My initial reaction was outrage."

In a follow-up interview with SolveClimate News, Winston said it was ridiculous that some senators told him they didn't comprehend the meaning of the researchers' findings.

"It's plain English," he said. "These are clear and declarative sentences ... saying the state legislature is required to act. State legislators seem to have sat on this information. This is bad faith. It's not the way we do business in the state of Nebraska."

The memo, written by a legislative attorney and an energy specialist at the Congressional Research Service, is dated Sept. 10, 2010. It is addressed to Nebraska Rep. Lee Terry, a Republican elected to his seventh congressional term last November, who evidently posed the initial question. The service, part of the Library of Congress, helps federal lawmakers by providing comprehensive legislative research and analysis.

"You have asked CRS to provide you with background information on the federal role in the development of pipelines for the transmission of oil in the United States," the two researchers wrote in their introductory paragraph.

Five pages later, the memo states: "The federal government does not have siting authority for oil pipelines, even interstate pipelines." A few sentences later, it continues: "In the absence of federal government siting authority, state laws establish the primary siting authority for oil pipelines, including interstate oil pipelines. In Nebraska, there do not appear to be any permitting requirements that apply specifically to the construction and operation of oil pipelines."

TransCanada Downplays Memo's Significance

"This memo is nothing new," TransCanada spokesman Shawn Howard told SolveClimate News in response to a query. "This information has been debated back and forth for years."

He pointed out that TransCanada collaborates with local, state and federal government officials on aspects of pipeline construction such as emergency response planning and with local governments on issues such as road building and repairing.

"We follow the processes put in place by each state regarding negotiating and obtaining easements," Howard said. "Some states have set up processes for siting pipelines, but Nebraska has not."

"TransCanada puts a lot of effort into building relationships with landowners and communities where our pipelines operate," he continued, adding that the company’s U.S. history dates back 60 years.

"If legislation changed, it would change what we may be required to do, however, it would not change the way that we treat landowners. We believe we have done an excellent job in working with landowners. We also recognize that some people may not agree with something, which is why each state has established independent processes to resolve these issues."

Where the Pipeline Stands at State Department

All along, most Nebraska legislators — the state has one body of 49 senators — have maintained that only Congress or the U.S. State Department has decision-making power on oil pipelines such as Keystone XL.

Indeed, due to the international nature of Keystone XL, Secretary of State Hillary Clinton's team is tasked with granting a thumbs up or down to TransCanada’s request for a presidential permit to build and operate infrastructure being designed to pump up to 900,000 barrels of heavy crude daily. The Canadian National Energy Board approved its portion of the project in March 2010.

If built, Keystone XL's six-state U.S. portion would stretch 1,375 miles through Montana, South Dakota, Kansas, Nebraska, Oklahoma and Texas.

Indeed, Clinton's team will be deciding "yes" or "no" on whether the pipeline is allowed to cross the U.S.-Canadian border. Winston and other pipeline opponents say State Department officials also can require TransCanda to reroute Keystone XL if its proposed path can be shown to cause economic or environmental harm.

State Department specialists are now in the midst of beefing up their environmental impact statement. Conservationists, anti-pipeline legislators and the Environmental Protection Agency blasted off with a lengthy list of inadequacies they cited in the initial draft document released last year. 

A tentative schedule outlined by environmentalists has the State Department releasing its newest document in mid-April. Green groups are requesting that the ensuing 45-day public comment period be extended and that residents of the six affected states be allowed to testify at a new series of public hearings. That would still give the federal government time to reach a decision on the multi-billion dollar proposal by the end of the year.

What the Memo Means for Nebraska

Unlike several other states on the Keystone XL route, Nebraska does not have any sort of commission that regulates oil pipeline siting.

"TransCanada likes it that way," Winston said, "because they don't have to get state permits for projects such as Keystone XL."

Though a TransCanada spokesman dismissed the Congressional Research Service memo as "nothing new," Kleeb and Winston see it as a linchpin for securing such a law during this legislative session.

Currently, three pipeline-related measures are languishing in the Natural Resources Committee. But with the clock ticking, none of them has advanced. The current 90-day legislative session has just 30-plus days remaining.

Still, advocates such as Winston see daylight for adding an amendment to the strongest pending bill. Ideally, they want to force lawmakers to pass a measure that gives the already-existent Public Service Commission permitting authority for oil pipelines and also spells out financial insurance requirements and liability and siting standards for pipeline builders.

Advocates also are considering filing a lawsuit on behalf of Nebraska landowners along the Keystone XL route that TransCanada has threatened with eminent domain. Without a permit from the State Department, Winston said, TransCanada has no business deploying eminent domain as a tactic.

As it stands now, almost 300 miles of that pipeline is destined to cross 645 tracts of private land in 14 Nebraska counties. TransCanada has evidently reached easement agreements with most of the roughly 470 property owners along the route.

Ogallala Aquifer Top Protection Priority

John Hansen, president of the Nebraska Farmers Union, participated in the Lincoln news conference Wednesday. In March, the national organization adopted a resolution proposed by the Nebraska affiliate that opposes "any infrastructure or resource development that jeopardizes the health, safety and quality of the Ogallala Aquifer" and "the use of eminent domain without the developer putting in place environmental safeguards and assuming liability for damages."

Advocates fear that leaks of diluted bitumen from the Keystone XL could threaten the Ogallala Aquifer, a massive underground water source in the Midwest and Great Plains that supports agriculture and provides drinking water for millions.

Both of Nebraska's U.S. senators — Democrat Ben Nelson and Republican Mike Johanns — have prodded the State Department to protect their home state's natural resources.

Last fall, Johanns wrote a letter urging officials to reroute the Keystone XL pipeline north from Steele City, Neb., to the U.S./Canada border in North Dakota instead of Montana. A more easterly route, the junior senator said, would skirt the Ogallala and Nebraska's sandhills, the state’s most fragile and vulnerable ecosystem that draws thousands of tourists annually.

The senator's suggested alternate route would position Keystone XL parallel to a separate TransCanada oil pipeline — called the Keystone — in eastern Nebraska where the soil is clay-based, not sandy. Keystone, a two-year project completed last June, is already carrying heavy crude oil from Alberta's tar sands. Steele City is in far southern Nebraska, near the Kansas border.

Back in August, Johanns intervened when TransCanada issued letters to landowners threatening to use eminent domain to obtain easements for Keystone XL construction. TransCanada authorities responded by telling Johanns the company would refrain from using eminent domain as a way to advance pipeline right-of-way negotiations.

Foreign Affairs Subpanel Reviews Keystone XL

Though it was purely coincidental, the Nebraska advocates executed their teleconference the day before Rep. Connie Mack scheduled a House Foreign Affairs subcommittee hearing centering on Keystone XL.

Back in February, the Florida Republican coaxed 29 fellow representatives from both sides of the aisle into signing a letter encouraging Clinton to grant TransCanada a permit for Keystone XL.

As unrest has erupted across Northern Africa and the Middle East, the representatives painted the pipeline issue as one of national security by telling the secretary of state: "Without plentiful sources of energy, the United States must accommodate and pander to oil-producing nations with autocratic governments whose behavior would be profoundly condemned in other circumstances."

Mack invited four witnesses to testify before his House Western Hemisphere subpanel Thursday afternoon. Only one of them, however, has spoken out against the pipeline. National Wildlife Federation senior vice president for conservation and education Jeremy Symons has joined other environmental organizations in opposition. The federation and like-minded green groups such as Friends of the Earth and the Sierra Club have also funneled their anti-pipeline efforts into advertising and public relations campaigns.

The other three speakers invited to Mack's hearing have all touted oil sands as a solution to the nation's transportation fuel woes. They include David Goldwyn, who recently left his position as the State Department's special envoy for international energy issues to lead a private consulting business; Lucian Pugliaresi, president of the Energy Policy Research Foundation Inc.; and Paul Sullivan, professor of economics at the National Defense University and adjunct professor of security studies and international affairs at Georgetown University.

Ballot Initiative on the Horizon?

Far away from the hearing rooms in Washington, pipeline opponents have found a new toehold in the protracted battle over the pipeline. If state legislators refuse to draw up regulations for oil pipelines, Kleeb said, she and other advocates will go directly to Nebraska voters.

"If I were in their shoes, I’d be calling an emergency meeting," she said. "But if they continue to be stubborn, I think we go ahead and raise a million dollars and go to the public with a ballot initiative.

"Is that going to be incredibly difficult?" Kleeb asked before answering her own question. "Yes. But would I dedicate two years to make sure these public officials are held accountable? Absolutely."

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