Final decision on Keystone XL pipeline may end up in Nebraska’s hands
The odds of TransCanada Corp.'s (TSX, NYSE:TRP) controversial Keystone XL pipeline getting approved increased last week after the Republican-controlled U.S. House of Representatives passed a bill supporting the project.
And while tomorrow is the Senate’s turn to vote on the long-delayed $5.4 billion project, analysts believe the pipeline’s fate is unlikely to be sealed then. Instead, chances are the Nebraska Public Service Commission will have the final saying, as a state court ruled in February that a hastily-passed state law that gave outgoing Republican governor Dave Heineman power to approve a new route for the pipeline in 2013 was unconstitutional.
The Nebraska Supreme Court is expected to rule within weeks on whether the Public Service Commission would have to review the pipeline before it can cross the state.
The commission’s possible role is part of the tangled legal and political history of the pipeline and raises questions about whether it will continue to be snagged even if the Senate votes to approve it as expected.
Supporters of the plan say the Nebraska case is only in regards to the proposed route. So while the ruling wouldn't prevent the Federal Government from approving the pipeline, it would likely delay it further and increase costs. Opponents say a route would need to be accepted before the whole project can be approved.
The long-dragged Keystone XL, which would transport up to 830,000 barrels of oil sands crude per day from Alberta to the U.S. Gulf Coast, has been awaiting U.S. approval for six years and it could be longer. Even if the Senate votes in favour of the project tomorrow President Barack Obama has the power to not sign legislation passed by both houses of Congress.