Nebraska Supreme Court discusses pipeline
September 27, 2014
Those who haven't piped up to voice an opinion on TransCanada's proposed Keystone XL are likely in the minority. Strong feelings abound on the proposed 1,179 mile pipeline that would connect eastern Alberta with the southeastern corner of Nebraska. The pipeline is intended to provide a means of transporting unrefined oilfield product to final shipping points or refineries along the route.
After six years in limbo, the pipeline's future may have been determined in just 30 minutes on Sept. 5.
Attorneys for the state of Nebraska defended their governor and legislators in an oral argument before the Nebraska Supreme Court. The judges, after questioning the state defense attorneys and an attorney representing three landowners opposed to the pipeline, are now faced with determining whether or not the method used by Nebraska Governor Heineman and the Nebraska Legislature to approve the pipeline in 2012 was constitutional.
Sometime after the November fourth election, is when Dave Domina, an attorney representing three landowners whose property lay in the path of the proposed pipeline, expects to see a ruling from the state supreme court. While he figures his clients technically have a 50/50 chance at victory, he said he doesn't speculate about the outcome. But he is cautiously optimistic.
The constitutionality is at question because two years ago the legislature approved a law to allow the pipeline to progress through their state. Domina and his clients say only the Nebraska Public Service Commission has that authority.
Domina was asked during the Sept. 5, hearing to distinguish his case from one 40 years ago that dealt with the state natural gas pipeline and whether or not that case should be considered precedent for the Keystone XL case. "That case was not really related but there was a case from 19 years back that favors us. I distinguished the two cases for them," Domina said.
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The attorney general's representative was asked questions that were much more pointed and problematic to try and answer than his, Domina said.
Pipeline supporter Nebraska Farm Bureau has allowed the state to take the lead on the constitutionality issue but in general the organization supports the building of the pipeline. Jordan Dux, the director of national affairs with the state organization, said the pipeline will cross through the property of some of their members, and some of their members own property on which the original Keystone Pipeline sits.
"The needs of modern agriculture when it comes to energy are significant," Dux points out, indicating an increased need for fuel.
Building the pipeline is important for more than just the oil industry, Dux said. "The effects of not having this pipeline built are being felt especially by grain farmers. A number of railcars are being diverted to the Bakken oil field. This is causing massive problems as you look through the rest of the system. There are only so many locomotives in the system and when the oil shipments take priority over grain shipments, that causes a problem," Dux said. The proposed Keystone XL is intended to transport crude oil from the Montana and North Dakota drilling sites in addition to moving Canadian oil, he said.
Dux added that concerns over the environmental impacts are blown out of proportion.
"When you look at the science and the technology they are putting into this, the concerns about water quality are unfounded," Dux said. Any leak would be localized and would move slowly through the rock in the underground aquifer, Dux said. "We aren't concerned with massive aquifer contamination. The aquifer isn't an underground lake like a lot of people are thinking."
Domina's clients are not comforted. The easement terms the company has offered have caused worried landowners to band together in an effort to negotiate more favorable terms if the pipeline comes through against their wills. "We want to require that they take it out of the ground instead of abandoning it when they are done with it. Currently their conditions would set us up for a fight between landowner and company if a spill occurs," Domina said, adding that attorney fees could destroy a farmer or rancher financially. "Usually with easements like this, the company says, 'If we have a spill it is our problem,' and they say, 'When we are finished with the pipeline we will take care of cleanup and removal.'" Domina said. "TransCanada has been a bully. They are trying to push those responsibilities off."
A farmer feeder from Polk County, Neb., signed easements with TransCanada over two years ago to give the company permission to cross through a tract of farm ground to lay the pipeline.
Keith Peterson of Osceola – 90 miles west of Omaha – said he and any other landowner who agreed to allow the pipeline to be built, received one-time easement compensation that is meant to cover the value of lost income while the pipeline is built as well as a general reimbursement for the use of the property. It has been about two years since he signed an easement.
A past Polk Co., planning committee chair, Peterson as "heard all sorts of people, pro and con, at public meetings."
Peterson said, based on reclamation of ag land east of him that hosts the current Keystone pipeline, he doesn't worry that there will be long-term problems with productivity on his farm ground, once the construction site is restored. "I go across the other pipeline TransCanada built (Keystone) when I go to Omaha. I think concerns about ruining the long term productivity of the land are far-fetched."
A leak is unlikely, Peterson believes, but he is confident in TransCanada's commitment to manage any such situation.
The authority of the Nebraska Public Service Commission was bypassed when, in 2012 the unicameral legislature, in a last-minute effort, hog-housed an unrelated bill and approved a law that allowed the pipeline to cross their state in an alternate route, said attorney David Domina. As legal counsel for three landowner opponents to the pipeline, he said his clients are categorically opposed to TransCanada building any kind of a pipeline in their state because it has conducted itself "so inappropriately."
Peterson believes a strong majority of landowners along TransCanada's Nebraska path have already agreed to allow the company to build.
The current Keystone pipeline – not to be confused with the proposed Keystone XL – crosses the state from north to south, near the eastern edge of the state. The proposed pipeline crosses more diagonally, entering Nebraska near Burke, S.D., making its way south and a little east to Steele City.
The existing line continues to Cushing, Okla, and you can get from Cushing to the Gulf, said Domina, but the existing pipeline is not built for the load that the Keystone XL would carry, which is why the new "XL" pipeline is under consideration.
The state of South Dakota had approved the pipeline route but that approval has run out, Domina said. Approval remains current for North Dakota, Montana and Kansas. Domina wasn't sure about Oklahoma or Texas.
According to the Associated Press, "The operator of the long-delayed pipeline has formally asked South Dakota's utility regulators to recertify the portion of the project that runs through the state. The Public Utilities Commission must recertify that the conditions for construction of that portion of the pipeline haven't changed since the permits were issued in 2010. Opponents of the project, including the group Dakota Rural Action, have vowed to fight the recertification. The company says the project would generate $20 million in taxes per year for the counties through which the pipeline would run."
At a Sept. 18, press conference, several Republican senators called for President Obama to approve the Keystone XL pipeline ahead of the sixth anniversary of TransCanada's original application. South Dakota's Senator Thune said the pipeline is environmentally safe, would provide jobs and could help relieve the pressure on railroads to transport increasing volumes of crude oil product. "[Building the pipeline] reduces the bottleneck we have on railroad service in our country…We [in South Dakota] are having a hard time getting our agricultural commodities to marketplace because of all the backlogs that have been created. And I'm not saying this is going to resolve all those…but one thing is pretty certain, and that is if you are not moving all [the Bakken oil] on rail, that means there are going to be more locomotives and more rail service to move the agricultural harvest that we are really concerned about."