LINCOLN — A judge has struck down a Nebraska law used to reroute the Keystone XL pipeline, although it appeared Wednesday that the ruling represents another delay rather than a fatal blow to the project.
Lancaster County District Judge Stephanie Stacy ruled that the 2012 law unconstitutionally gave the governor authority to approve the oil pipeline route in Nebraska. That authority properly rests with the Nebraska Public Service Commission, the judge decided.
The court also declared the state's approval of the Keystone XL route “null and void.”
“The pipeline project is at a standstill in this state,” said Omaha attorney David Domina, who represents the three landowners who challenged the law.
Attorney General Jon Bruning filed notice that he intends to appeal the ruling to the Nebraska Court of Appeals. Gov. Dave Heineman, who approved the pipeline route, said he supported the decision to appeal.
“This is an important issue for the state of Nebraska,” Heineman said in a statement.
Domina said he doesn't think the ruling will necessarily derail the State Department's ongoing review of the pipeline.
The federal agency is currently weighing whether the project is in the national interest and should receive a presidential permit to cross the U.S.-Canadian border.
President Barack Obama has said he will make the final call on the Keystone XL.
State Department officials were aware of the judge's ruling but otherwise declined to comment on how it might affect their review process.
TransCanada, the company that wants to build the pipeline, could apply immediately to the Public Service Commission for a new Nebraska route. As of Wednesday, it had not done so, said Laura Demman, the commission director in charge of pipelines.
Under its rules, the commission must issue an order within seven months of an application, unless both parties agree to an extension. If a pipeline receives a presidential permit, however, the commission must make its decision within eight months, Demman said.
Officials with TransCanada declined to discuss what they will do next.
“We are disappointed and disagree with the decision,” said Shawn Howard, a spokesman for the company. “We will now analyze the judgment and decide what next steps may be taken.”
The ruling came nearly five months after the attorneys for the landowners and the state argued the case.
At issue was a 2012 law that received overwhelming support in the Nebraska Legislature.
The legislation was passed to give TransCanada an alternative way to obtain route approval that bypassed the Public Service Commission process.
At the time, the company needed a new route because, several months earlier, the president had denied the first application for the project. Nebraska officials requested that the new route reduce the threat of environmental impact by avoiding the Sand Hills and the region's Ogallala Aquifer.
The 2012 law allowed TransCanada to seek the governor's approval after first obtaining a review by the Nebraska Department of Environmental Quality.
The governor approved the new route on Jan. 22, 2013, after the department concluded that the project presented little threat of widespread groundwater contamination.
The landowners who brought the lawsuit argued that the law violated the Nebraska Constitution by giving regulatory control over pipelines not to the commission, but to the governor and the Department of Environmental Quality. Therefore, the law improperly delegated a responsibility of the legislative branch to the executive branch.
The judge agreed.
“The court finds no set of circumstances under which such provisions could be constitutional,” she wrote in her ruling.
The ruling was hailed by Susan Dunavan, one of the plaintiffs whose land south of York is crossed by the proposed route.
“We're ecstatic,” she said. “It shows our elected officials have to be held accountable for their actions.”
The $5.4 billion pipeline would carry 830,000 barrels of heavy oil sands crude daily from Canada to refineries on the U.S. Gulf Coast.
The State Department recently completed an environmental analysis of the project, concluding that it would not significantly increase greenhouse gas emissions.
The analysis also found that although the pipeline would still cross parts of the Sand Hills and the Ogallala Aquifer, a spill would not be likely to result in widespread contamination.
The project is now awaiting review by other federal agencies before Obama decides whether to approve it.
Although TransCanada has negotiated land easements with about 70 percent of the property owners along the route in Nebraska, Wednesday's ruling prevents the company from using eminent domain to obtain the land of holdouts.
Rep. Lee Terry, R-Neb., a strong proponent of the pipeline, called the judge's ruling a “terrible decision” and expressed confidence that it will be overturned. But he also argued that it should trigger no further delays at the federal level.
“Let me be very clear — this decision does not impede President Obama from doing the right thing after five years of delays and signing the permits,” Terry said in a statement.
Jane Kleeb, director of pipeline opponent Bold Nebraska, said the State Department will have to hit the pause button now that TransCanada has no Nebraska route. The department will have to do a new environmental review in Nebraska if the company succeeds in gaining approval for a new route, she argued.
She predicted more lawsuits by national environmental groups if the State Department moves forward without waiting for the issues in Nebraska to be settled.
She and other pipeline opponents suggested that the law struck down Wednesday was essentially written by TransCanada, which hired lobbyists in the state during the 2012 session.
“That's just plain silly,” said State Sen. Jim Smith of Papillion, who introduced the 2012 law.
Representatives of the company had input, he said, but he and the 43 other senators who voted for the bill were confident that it met constitutional muster. He called the judge's ruling “disappointing.”
Former State Sen. Chris Langemeier, who was involved in the passage of the 2012 law, said he didn't have an inkling that it would be ruled unconstitutional.
“Everyone who supports it, and definitely those who don't support it, want to make sure every step is taken so it's the safest pipeline ever built,” Langemeier said. “I have every confidence that will happen.”
It's possible that Smith or another lawmaker could try to fix the law during the current legislative session. Although the deadline for bill introductions has passed, a new bill could be considered if 30 of the 49 senators voted to do so.
World-Herald staff writer Paul Hammel contributed to this report.