Nebraska Governor Approves Keystone Pipeline Route, Puts Pressure on Obama

By Will Oremus

Posted Tuesday, Jan. 22, 2013, at 12:39 PM ET

U.S. President Barack Obama speaks at the southern site of the Keystone XL pipeline on March 22, 2012 in Cushing, Oklahoma.

Photo by Tom Pennington/Getty Images

On Monday, President Obama made climate change a focus of his second inaugural address. On Tuesday, he was confronted with news that could help prompt a showdown over what is likely to be one of the most controversial environmental issues of his second term: approval of a massive Canada-to-Texas oil pipeline.

The news is that Nebraska Gov. Dave Heineman has approved a revised route for the Keystone XL pipeline through his state. That removes one of the main obstacles Obama cited in delaying the project a year ago. Landowners in Nebraska have worried that the pipeline could contaminate the Ogallala aquifer, an important groundwater source. The new route is designed to bypass the most sensitive areas.

There’s little doubt the Keystone XL project would create short-term jobs and bolster the flow of oil to the United States. On the flipside, it would mean greater U.S. reliance on oil from Canada’s tar sands, one of the most environmentally destructive forms of fossil fuel, at a time when Obama is telling the American people that we owe it to our grandchildren and God alike to tackle the threat of climate change.

In 2011, Republicans sensed an advantage in the jobs-vs.-climate-change struggle but overplayed their hand by forcing Obama to make a quick decision on pipeline approval. Instead he instructed the State Department to seek a new route, citing the opposition from Nebraska’s own Republican governor, among others. Now that Nebraska is on board, the choice becomes more stark. Reject the project purely on climate-change grounds and Obama will be pilloried by the right as an environmental extremist, sacrificing the economy at the altar of environmentalism. Approve it and his strong words on climate change will ring empty once again to his supporters on the left.

Neb. Governor OKs Keystone XL Route Through State

By GRANT SCHULTE Associated Press

LINCOLN, Neb. January 22, 2013 (AP)

Nebraska Gov. Dave Heineman approved a new route for the Keystone XL oil pipeline on Tuesday that avoids the state's environmentally sensitive
Sandhills region.

The Republican governor sent a letter to President Barack Obama and Secretary of State Hillary Clinton saying he would allow the pipeline to proceed through his state.

His announcement came one day after Obama promised in his inauguration speech to tackle climate change during his second term. Pipeline opponents have urged the president to deny a federal permit for the project, which is required because the Canada-to-Texas pipeline crosses an international border. Obama rejected the original proposal for the pipeline last year and later agreed to let construction begin on a southern leg of the project starting in Cushing, Okla.

The project has faced some of its strongest resistance in Nebraska from a coalition of landowners and environmental groups that say it would contaminate the Ogallala aquifer, a massive groundwater supply. Canadian pipeline developer TransCanada and some unions say the project is safe and will create thousands of jobs.

Surveys commissioned by the University of Nebraska, independent polling firms and industry-backed groups have shown that most Nebraska residents support the project itself, but wanted a route that avoided both the Sandhills and the Ogallala aquifer. Public outrage over the original route prompted Heineman to call state lawmakers into a special session in 2011, but the issue hasn't gained as much traction in the Legislature after TransCanada agreed to keep the project out of an area that state officals designated as the Sandhills.

TransCanada's pipeline is designed to carry tar sands oil from Canada across Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas. The company also has proposed connecting it to the Bakken oil field in Montana and North Dakota.

The original Nebraska route would have run the pipeline through a region of erodible, grass-covered sand dunes known as the Sandhills. Heineman said in his letter that the new, 195-mile route through Nebraska avoids the Sandhills but would still cross over a small part of the aquifer.

The pipeline's most vocal critics remain firmly opposed to the project.
"Gov. Heineman just performed one of the biggest flip-flops that we've seen in Nebraska political history," said Jane Kleeb, executive director of the group Bold Nebraska.

Heineman has previously said he would oppose any pipeline route that endangered the aquifer. In his letter to federal officials, Heineman said any spills along the new route would be localized, and any cleanup responsibilities would fall to TransCanada. He also said the project would result in $418.1 million in economic benefits for the state, plus $16.5 million in state tax revenue from the pipeline construction materials.

Kleeb said those estimates came from a study commissioned by TransCanada that included job-creation numbers which have since been debunked. The report done by the Perryman Group originally claimed that project would create 20,000 jobs, but estimates later used by the State Department said the project would create 5,000 to 6,000 construction jobs during the roughly two years it would take to build the pipeline.

Those favoring the Keystone XL project, including such organizations as Americans for Prosperity, the Consumer Energy Alliance and Nebraskans for Jobs and Energy Independence, have cited the nation's need for more oil and praised its potential economic impact.

Heineman said TransCanada has assured state environmental officials that the company would create an emergency response plan in case of a spill and would test water wells at landowners' request.

TransCanada executives have said the company will build a pipeline with rigorous safeguards and carry $200 million in third-party liability insurance to cover cleanup costs in Nebraska. TransCanada CEO and President Russ Girling said Tuesday that the project had passed a strict review and would help national security.

"The need for Keystone XL continues to grow stronger as North American oil production increases, and having the right infrastructure in place is critical to meet the goal of reducing dependence on foreign oil," Girling said in the statement. "Keystone XL is the most studied cross-border pipeline ever proposed, and it remains in America's national interests to approve a pipeline that will have a minimal impact on the environment."

Canadian officials also cheered the announcement.

"As we have repeatedly said, the Keystone XL Pipeline will create thousands of jobs on both sides of the border — including 140,000 in Canada," said Andrew MacDougall, a spokesman for Canadian Prime Minister Stephen Harper.

Canada exports most of its oil to the U.S. and needs a way to move its growing oil sands production from northern Alberta, which has more than 170 billion barrels of proven reserves. Daily production of 1.5 million barrels from the oil sands is expected to increase to 3.7 million in 2025. Only Saudi Arabia and Venezuela have more reserves.

Pipeline opponents are still challenging a Nebraska pipeline-siting law that was written as part of a deal to let state officials review the project. The plaintiffs — a group of Nebraska landowners opposed to the project — say they are concerned that a pipeline company could use the state power of eminent domain to obtain land for a project. A judge has allowed the lawsuit to proceed in court.