Heineman: Pipeline decision disappointing; NU timing “not the best”

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January 19th, 2012

Lincoln, NE – Gov. Dave Heineman says President Barack Obama’s rejection of the proposed Keystone XL pipeline, at least for now, leaves Nebraska officials trying to figure out what that means for Nebraska.

Gov. Heineman said Obama's decision to reject the Keystone XL pipeline will mean "greater dependence on middle eastern oil." (Photo courtesy State of Nebraska)

In rejecting the proposed Keystone XL pipeline, President Barack Obama and administration officials said there wasn’t enough time to study things including a new route through Nebraska before the Feb. 21st deadline. But in an interview with NET News, Gov. Dave Heineman said things didn’t have to go that way.

“First of all I’m disappointed,” Heineman said, “because I thought he could have made a conditional yes. And TransCanada was perfectly willing then to start on the northern and southern borders of the United States and begin to build the pipeline while we finish our process here in Nebraska.”

“To me, it’s a decision that said no to American jobs, but greater dependence on middle eastern oil,” he said. “And we shouldn’t go there.”

Heineman says Nebraska’s already hired a consulting firm to evaluate TransCanada’s proposal for a new route to avoid the Sandhills, which he says the company was close to submitting. If TransCanada now has to submit a new application, he said, that could trigger a review by the Public Service Commission. A law passed in last year’s special session created an expedited review for the Keystone proposal by the Department of Environmental Quality and the governor. That process was supposed to be completed this summer, but the president’s announcement has presumably put any decision on a new application beyond this fall’s election.

On another subject, Heineman gave a cool reception to a University of Nebraska proposal for health-building projects in Lincoln, Omaha and Kearney. The University proposes getting $91 million for the projects from the state’s cash reserve. But the governor doesn’t want to dip into that pot.

“The members of the Appropriations committee have been telling me for the past year ‘We need to rebuild the cash reserve.’ I agree with them,” Heineman said. “We need to rebuild it for when that economic downturn comes in another few years, because we always have those in the cycle. That’s when we need the money.”

“Having said that,” Heineman added, “the University may have some very good projects, but the timing is not the best. And so I think it would be more fiscally prudent – let’s get the cash reserve rebuilt before we move forward on any new construction projects.”

The cash reserve is currently projected to contain about $414 million at the end of next fiscal year. That’s about 11 percent of the tax revenue the state expects to take in. Three years ago, the reserve peaked at about 17 percent of tax revenues. But for more than twenty years, from 1983 through 2006, the reserve varied between about one percent to eight percent.

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