Nebraska Keeps Door Open to Keystone XL Legal Challenges

Today, the Nebraska Public Service Commission (PSC) again dealt a blow to TransCanada’s hopes to ram the Keystone XL tar sands pipeline through the state. The decision—which also denied a motion by landowners that would have forced TransCanada to submit a brand-new application to the PSC—means that TransCanada must live with the PSC’s November ruling that denied the company’s preferred route through the state. While this may make TransCanada’s life easier in the short term (they don't need to restart the PSC permitting process from the beginning), it also creates larger legal vulnerabilities for the project. As explained below, these legal vulnerabilities could add years of new delay for the pipeline.

Beginning today, a 30-day clock begins ticking for any intervenors to the PSC permitting process to appeal the PSC’s November 20 permit decision to the Nebraska courts. Assuming an appeal from any side, it is expected that final resolution by the Nebraska Supreme Court could take as long as two years to resolve. If TransCanada were to eventually prevail, it would be stuck with a tar sands pipeline coming online at a time when Canadian energy regulators expect tar sands production growth to have slowed to almost zero in anticipation of a peak in the mid-2020s. In other words, delay of this length could equal obsolescence before tar sands ever flow through the line.

In the meantime, the alternative route that the PSC did approve has never received close scrutiny from anyone. Landowners on the new route have already expressed concerns now that they have been notified that they too are part of a pipeline battle that has grabbed international attention. Meanwhile, in federal litigation against the Trump administration’s approval of Keystone XL’s cross-border permit, TransCanada and the U.S. government were dealt another setback last week when their motions to exclude expert testimony regarding endangered species impacts were denied. And that’s just piled on top of the fact that the project the State Department approved is now different than the project TransCanada would build due to the route change in Nebraska. The legal implications of this will also need to be worked out in the coming months and years.

At the end of the day, TransCanada continues to face an uphill battle with Keystone XL. Indeed, in a statement to the press last week, it appears that TransCanada's timeline for making an investment decision on the project--that is, to abandon it or proceed--has already slipped into 2018. What its proponents thought was good news when the Trump administration came into office and tried to force the issue has instead reinvigorated opposition to this environmentally destructive project that has no place in a world already dealing with the harmful impacts of climate change.

About the Authors

Josh Axelrod

Manager of fossil fuels and climate policy, Canada Project, International Program

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