TransCanada: Nebraska pipeline siting effort likely unconstitutional

Efforts by Nebraska’s legislature to influence siting of the proposed Keystone XL crude oil pipeline likely would be found unconstitutional, TransCanada Corp., the project’s sponsor, said on Oct. 31 as it release legal memorandums prepared at its request by two law firms. Nebraska Gov. Dave Heineman (R) said on Oct. 24 that he would call the state’s unicameral legislature into special session for that purpose starting Nov. 1.

TransCanada noted that Sidley Austin LLP, an international law firm, and McGrath North Mullin & Kratz PC LLO, an Omaha, Neb., law firm, prepared the memos at its request. Both firms have extensive experience analyzing and litigating constitutional issues, it added.

TransCanada said in a statement that the US Constitution and federal law give federal agencies, and not individual states, the role in determining whether a proposed interstate pipeline’s route poses environmental risks, and to weigh such risks against the project’s economic and other benefits.

Any pipeline siting act passed by Nebraska’s legislature in the special session would be targeted exclusively at stopping or redirecting Keystone XL, constituting discrimination against interstate commerce, the project’s sponsor continued.

“Congress has delegated the regulation of interstate pipeline safety exclusively to the federal government, not to individual states,” it said. “States cannot avoid that restriction simply by taking the word ‘safety’ out of pipeline siting legislation. It is the impact of a law—not its wording—that determines whether it is prohibited pipeline safety legislation. A bill intended to keep the Keystone XL pipeline out of the Ogallala Aquifer obviously would be pipeline safety legislation.”

TransCanada added that federal pipeline safety legislation already protects areas such as the Ogallala Aquifer, Nebraska’s primary underground freshwater source, which are unusually sensitive to environmental damage from a pipeline accident. “Based on the federal Pipeline Safety Act and the federal government's comprehensive regulation, state legislation that intrudes into this area is unconstitutional,” it said.

Alex Pourbaix, president of TransCanada's Energy & Oil Pipelines division, said the company felt it was important for Nebraskans to hear from all sides in this debate. He said that Sen. Mike Flood, the Nebraska legislature’s speaker, recently identified pipeline siting concerns following his own legal analysis which were similar to the findings of TransCanada’s outside counsels’ legal analysis. Heineman also said in an Oct. 25 press conference announcing the special session that legislators may find they do not have legal or constitutional grounds to move forward with siting legislation, Pourbaix said on Oct. 31.

The legislature was scheduled to convene at 2 p.m. CDT on Nov. 1 and begin public hearings on any proposed pipeline siting legislation on Nov. 7, according to information at its web site. The session is expected to last at least 2 weeks, it indicated.

Contact Nick Snow at nicks@pennwell.com.

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