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Protest against the Keystone XL tar sands pipelines in front of The White House in Washington, DC.
Protest against the Keystone XL tar sands pipelines in front of The White House in Washington, DC.
Fall-out from the ruling of a Nebraska district court judge Wednesday could postpone President Obama's long-awaited decision on allowing construction of the Keystone XL tar-sands pipeline a while longer, perhaps beyond the November election, a number of analysts say. That possibility comes at the same time the president's remarks about what he said to Canadian Prime Minister Stephen Harper in Mexico this week have given a smidgen of new hope that the White House may give the pipeline a thumbs down.

District Court Judge Stephanie Stacy ruled that a decision to transfer authority for approving the pipeline from the state's Public Service Commission to the governor's office was unconstitutional.

With the Final Supplemental Environmental Impact Statement on Keystone XL in hand, the U.S. State Department is currently engaged in a process to determine whether the pipeline crossing the Canadian border and traversing six states is in the national interest. Besides considering the views of eight federal agencies, including the Environmental Protection Agency, which has been critical of two previous versions of the environmental impact statement, the State Department is accepting public comments at this site until March 7. More than 7,350 comments have already been received.

In early 2012, Obama rejected the original pipeline route that builder TransCanada had chosen for Nebraska because of potential impacts on fragile, wildlife-rich wetlands, the state's Sandhills, a vast collection of what used to be dunes sitting atop the gigantic Ogallala Aquifer. TransCanada re-applied with an adjusted Nebraska route, a 195-mile segment of the 36-inch pipeline that is designed to carry a form of petroleum—bitumen—from tar-sands deposits in Alberta to Texas Gulf Coast refineries specially configured to handle heavy crude oil.

Nebraska's elected five-member Public Service Commission has been the authority overseeing approval of grain warehouses, taxis, buses and power lines for decades. The commission has its roots in a state railway commission set up in the late 1800s as a means to keep governors from doing favors to railroads.

In late 2011, the state legislature added pipelines to the commission's oversight through the Major Oil Pipeline Siting Act. It then passed another law, the Oil Pipeline Route Certification Act, specifically designed to run a speedy approval process of the Keystone XL followed by a confirming approval by the governor, without the Public Service Commission being involved. That end run is what Judge Stacy shot down.

Below the fold is additional analysis.  

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The governor approved the pipeline last year, which gave TransCanada the power of eminent domain. Landowners in Keystone XL's proposed path sued. Judge Stacy ruled in their favor making the approval of the pipeline's route null and void. The Public Service Commission could now review the route, but commissioners told Grant Schulte of the Associated Press that they would wait to see what happens to the appeal that Attorney Gen. Jon Bruning filed Wednesday with the Nebraska Court of Appeals just a few hours after Stacy announced her ruling.

That appeal could take weeks. And the case almost certainly would be appealed by one side or the other to the Nebraska Supreme Court, which, Schulte wrote, usually issues its opinions six to eight weeks after hearing a case. If the high court upheld Stacy's decision, the commission would be charged with reviewing the pipeline route. Its rules allow it seven months to assess a project after an application is received.

It would be astonishing if the commission failed to approve the pipeline route. But Anthony Swift, an international attorney with the Natural Resources Defense Council, told Bloomberg reporters that the commission's review would probably be “much more rigorous” than whatever process the governor followed. “I wouldn’t think it’s a sure bet by any means that the PSC will land on the same route,” Swift said in an e-mail. At his blog at the NRDC on Wednesday, Swift wrote:

"President Obama refused to make a decision on Keystone XL until it had a route in accordance with state law, and there is no reason for the president to change course now."
Later in the week, Swift  wrote:
It should be noted that there is still significant controversy surrounding TransCanada’s “new” route for Keystone XL through Nebraska. A large part of the governor’s process for getting the route for Keystone XL out of the Sandhills appears to have involved redrawing the map of the Sandhills (see below). As InsideClimate News and E&E News have reported, the new route for the pipeline still places it in some of the most sensitive, sandy regions of Nebraska’s Ogal[l]ala Aquifer. And that’s small comfort to Nebraska’s landowners, given the impact that tar sands spills have been shown to have on waterbodies, uncertainties surrounding spill cleanups in aquifers, and Keystone XL’s leak detection system inability to detect leaks smaller than half a million gallons per day.
Under the circumstances, several analysts say, there is good reason to believe President Obama will delay his own decision on Keystone until the Nebraska situation is resolved, according to Elana Schor at Environment & Energy Publishing:    
Beyond the White House's role, the State Department could choose to pause its national interest determination on the pipeline while the Nebraska route is re-examined, ClearView Energy Partners LLC analyst Kevin Book advised clients in a note yesterday. [...]

"Whether or not State stops the [national interest determination] clock, agency and White House spokespeople have strenuously reiterated that neither the secretary of State nor the president will be hurried into making any decisions," Book wrote. "In short, 'Keystone Standard Time' seems poised to drag on a little longer ... it could potentially stretch beyond the November 4, 2014, midterm elections."

Meanwhile, at the so-called Three Amigos Summit in Toluca, Mexico, no public mention was made of Keystone until the final news conference. But then President Obama spoke of his exchange with Prime Minister Harper. The Canadian Press reported:
“Stephen and I, during a break after lunch, discussed a shared interest in working together around dealing with greenhouse gas emissions. And this is something that we have to deal with” [...]

“I said previously that how Keystone impacted greenhouse gas emissions would affect our decision. But frankly, it has to affect all of our decisions at this stage because the science is irrefutable."

"It has the potential of displacing people in ways that we cannot currently fully anticipate and will be extraordinarily costly. So I welcome the work that we can do together with Canada." [...]

“We only have one planet,” he said, adding “we do have to point to the future” to influence other big emitters such as China and India, and “have leverage” over them.

That sounds to some close observers like a man who could be on the verge of rejecting the pipeline.

Or not.

Reading the tea leaves of the Obama administration's environmental statements has practically become a cottage industry for environmental advocates regarding Keystone XL and other issues. The president's climate change speech in June got that treatment. And so has Secretary of State John Kerry's speech in Jakarta this week. Powerful words in both.

But critics both mild and sharp have pointed to differences between words and actions. And between actions as well. After cheering Obama's decision in January 2012 to temporarily reject the northern segment of the pipeline, the mood turned gloomy in March that year when he expedited the southern segment. Anybody outside the president's inner circle who says with certainty what Obama's decision will be is guessing.

Extended (Optional)

Originally posted to Meteor Blades on Fri Feb 21, 2014 at 03:17 PM PST.

Also republished by Gulf Watchers Group, Climate Hawks, Climate Change SOS, DK GreenRoots, and Daily Kos.

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