5 Things You Must Know About The XL Pipeline Lawsuit

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September 4th, 2014

Lincoln, NE — The hearing, starting at 9 a.m. CT, will be broadcast live on NET-2 Television and streamed on NETnebraska.org.

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After six years of national debate, the Nebraska case has become a crucial test for TransCanada Corp’s $5.4 billion pipeline. The project, if completed, would connect Western Canada’s tar sands region with Texas oil refineries.

The Friday hearing is scheduled to last only 30 minutes, but that is nearly twice as long as the state’s high court normally allots for appellate cases.  In February, Lancaster District Court Judge Stephanie Stacy sided with landowners who want the siting decision left to the five-member Nebraska Public Service Commission. Gov. Dave Heineman asked the Nebraska Supreme Court to overrule.

It will be late fall or even early next year before the Supreme Court issues its opinion, one of the most watched in the court’s history.

Here are five important things you should know heading into the hearing:

  1. What’s going to be decided?
    The first thing you need to know is this: the Nebraska Supreme Court will not decide if the Keystone XL crude oil pipeline is a good thing or a bad thing. The lawsuit, now on appeal, asks who gets to approve its route through Nebraska. Did the state Legislature properly change the law taking authority away from the Public Service Commission and giving it to the governor?  If the justices conclude the law is unconstitutional, the Nebraska section of the pipeline project returns to square one.
  2. Why is the Nebraska Public Service Commission such a big deal in this case?
    The PSC is a unique beast. It’s an independent “fourth branch” of Nebraska government, with members elected from across the state. The state constitution gives it one big job: regulating businesses which carry stuff, including taxis carrying passengers, telephone lines carrying calls, and, since the 1800s, railroads carrying freight. (It started out as the Railway Commission!) In 2011 the Nebraska Legislature added major oil pipelines to the PSC list of responsibilities.  Then things changed.
  3. If the PSC regulates common carriers, why is there any debate?
    Supporters of the pipeline hoped to streamline the approval process for TransCanada, the company planning to use it to move crude oil from Canada to the refineries in Texas.  Just one year after state senators gave responsibility for oil pipelines to the PSC  the Legislature moved to ‘clarify’ the process. A new law gave companies like TransCanada the choice to take a second route for approval through the Office of the Governor, once the administration’s Department of Environmental Quality said the project was safe for land and water. TransCanada thought it was great. Pipeline opponents cried foul and a group of landowners on the route filed a lawsuit.
  4. If it’s not the merit of the pipeline being decided, what are they going to talk about?
    The question is whether the Legislature created a law in conflict with the state’s constitution when it gave the governor the power to sign off on oil pipeline projects. Attorneys for the landowners who filed the suit argue the Nebraska Constitution makes clear the Public Service Commission maintains sole power to regulation common carriers, which would include pipeline companies. The Nebraska Attorney General points out the constitution grants the PSC its powers “as the Legislature may provide by law.” That’s the primary issue the justices will scrutinize: did state senators improperly transfer authority for the pipeline to the governor.
  5. When the court issues its opinion will it settle it once and for all?
    Yes. But not really. The legal issue will likely be settled with some clarity.  The court’s opinion should make clear whether or not giving the governor a say in siting the pipeline was permissible under the state constitution. It’s a pretty straightforward question. If the Legislature acted legally the environmental review and recommendation by the Nebraska Department of Environmental Quality can proceed and a decision can be reached. If the justices throw out the law TransCanada will likely be required to start over and submit its full application to the Nebraska Public Service Commission. That would also delay any recommendation or action by the Obama administration.

 

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