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Keystone XL: Neb. Landowners Sue Governor, but Case May Not Get Heard

Landowners say pipeline siting law violates the Constitution. State says suit should be thrown out because landowners have no right to make the challenge.

Sep 27, 2012
Susan Dunavan is one of the landowners who filed the lawsuit challening Nebraska

Nebraska landowners who helped doom TransCanada's plan to build its Keystone XL pipeline through the Sandhills say their state is trying to rubber-stamp the project by using a law that loosens environmental and eminent domain protections.

So they're taking legal action.

Randy Thompson, Susan Luebbe and Susan Dunavan challenged Nebraska's controversial "pipeline siting" law in a lawsuit, claiming that it violates the state Constitution. The suit, filed in May, is against Nebraska Gov. Dave Heineman, the state treasurer and the director of the Department of Environmental Quality (DEQ).

Although the State Department has final say on whether to approve the Keystone XL's northern leg because it crosses a national border, Nebraska regulators are largely responsible for determining whether the pipeline's route through the state is safe to people and the environment. TransCanada's revised path avoids the fragile Sandhills, but it still crosses the Ogallala aquifer, a crucial water source for Nebraskans.

The pipeline siting law, which took effect in April, allows TransCanada and other companies to skirt a rigorous environmental assessment by going through the DEQ, and not through the state's stricter Public Service Commission.

The law also gives Heineman—who supports the pipeline—ultimate authority to approve or reject the Nebraska route. And it lets TransCanada confiscate private land for Keystone XL construction before it's federally approved. The landowners want the law declared unconstitutional and void for giving the governor "unlawful" authority over pipelines and their private property.

But it's still unclear if the case will be allowed to proceed.

During a hearing on Sept. 14, lawyers from the Nebraska Attorney General's office argued that the suit should be thrown out. They said landowners have no right to challenge the $2 million pipeline review process because it isn't being funded by taxpayers.

A judge from Lancaster County District Court is expected to rule on the state's motion to dismiss within the next few weeks.

The offices of the governor, the treasurer and the DEQ all directed questions about the lawsuit to the Nebraska Attorney General's office, which did not respond to requests for information.

Brian Jorde, one of the lawyers representing the landowners, told InsideClimate News he was "hopeful" his clients would get their day in court. The landowners "are essentially speaking on behalf of all Nebraskans," he said. "And if people who are taxpayers—who are landowners—can't [file] a suit to challenge constitutionality, then who can?"

Thompson, Luebbe and Dunavan are three of the most vocal opponents of the Keystone XL, which is designed to carry up to 830,000 barrels a day of dilbit, or diluted bitumen, from Canada to oil refineries in the Gulf Coast. They've played leading roles at hearings and protests and helped fuel the opposition that forced Pres. Obama to reject TransCanada's original path through Nebraska's Sandhills. Obama's move forced the State Department to start its environmental review from scratch, which postponed a final decision on the project to well beyond the presidential election.

All three once lived along the path of the pipeline, and although the current route no longer crosses Thompson's or Luebbe's land, they've stayed in the fight to help other landowners.

Inside LB 1161: Why Landowners Are Concerned

The landowners' lawsuit revolves around the contentious LB 1161. The law allows pipeline companies to submit proposed projects to either the DEQ or to the Public Service Commission, which have very different review processes.

The DEQ process requires the agency to hold at least one public hearing but doesn't specify how they will evaluate proposed pipeline routes. Pipelines reviewed by the DEQ are handed to the governor for approval or rejection, and the DEQ cannot overrule the governor's decision. The Public Service Commission adheres to a more rigorous process, requiring pipeline companies to submit detailed information about the environmental impacts of the pipeline route. It does not involve the governor.

TransCanada submitted its plan to DEQ when LB 1161 was passed in April. For now, the Keystone XL is the only pipeline affected by the law.

Jane Kleeb, director of the anti-Keystone XL group Bold Nebraska, said the current law creates a "choose your own adventure" scenario. She fears that companies will always select the easiest course. "[O]bviously they'll go through the DEQ process because they don't have to disclose much of anything, and the governor gets to easily sign off on the route."

Jorde, the landowners' lawyer, said the problem lies not in the DEQ, but in the lack of safety regulations.

"It's very possible the DEQ will do an outstanding job" evaluating the Keystone XL, he said. "But the law as it's drafted doesn't require a good job. It doesn't have standards or criteria in place."

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