Keystone XL Pipeline Faced Scrutiny in Nebraska Supreme Court September 5, 2014 Hearing

The Keystone XL pipeline project faced a major hurdle in the Nebraska Supreme Court last Friday, as federal approval of the pipeline may be influenced by the court’s decision regarding the constitutionality of the process by which the pipeline had gained approval to run through the state. The pipeline has been subject to delay for quite some time, and this year has been notable in the progression of the pipeline’s review. The year began with the U.S. Department of State’s (“State Department”) release of its Final Supplemental Environmental Impact Statement, which elicited sighs of relief from many who saw no more excuses for the federal government to delay approval.  An excuse did come quickly thereafter though in the form of an order from a Nebraska trial court that overturned the state law and Governor’s decision under which the Keystone XL pipeline had been approved by the state. On February 9, 2014, the state trial court ruled that the Nebraska Public Service Commission was the agency vested with the authority to decide the matter, based on a categorization of the pipeline as a “common carrier” over which the state constitution grants authority to the Public Service Commission. Following challenges raised regarding the trial court’s decision, the State Department announced in April that it would extend the period for government agencies to submit their views on the project, given “the uncertainty created by the ongoing litigation in the Nebraska Supreme Court which could ultimately affect the pipeline route in that state.” The Nebraska Supreme Court heard oral arguments regarding the propriety of the state trial court’s ruling on September 5, 2014, delving into whether the landowners who brought the suit have standing and the common carrier classification made by the trial court.

Given the Administration’s desire to await a decision from the Nebraska high court, a final decision regarding approval of the project is not expected until after mid-term elections in November. It is reported that approval of the Keystone XL pipeline is high on the list of priorities for Republican senators, “[a]s odds improve that the GOP will control both chambers of Congress next year.”  A bill to expedite approval for the Keystone pipeline was passed by the Senate Committee on Energy & Natural Resources in June 2014 and still is pending consideration by the full Senate. You can read our previous Keystone posts for additional information. We will keep you posted on developments.