Nebraska court approves Keystone XL pipeline route

Nebraska court approves Keystone XL pipeline route

Construction of Keystone XL pipeline. (Image via Flickr.)

Nebraska’s highest court handed a small, but key victory to TransCanada Corp.’s (TSX, NYSE:TRP) Keystone XL Friday as it approved the route for the controversial oil pipeline, reversing a lower court that had blocked the proposal and clearing the way for a U.S. State Department ruling on the plan.

Four of the seven judges ruled that landowners who challenged the state law giving Nebraska's governor authority to approve the pipeline's route have standing to challenge the constitutionality of the law.

They also determined that a lower court correctly ruled the state law as unconstitutional. But Nebraska's Constitution requires a majority of five to deem any legislation as unconstitutional. And so, despite a majority of judges finding the law was unconstitutional, the lower court's decision was vacated, clearing the way for TransCanada's project.

The ruling means the final decision now rests in U.S. President Barack Obama's hands, as it allows the State Department to decide whether carrying Canadian oil sands fuel through the pipeline would be in the national interest, a necessary step for the cross-border energy project.

“Our position on Keystone remains the same: we believe the project should be approved,” said Minister of Natural Resources Greg Rickford. “ It will create jobs for American and Canadian workers, it has the support of the Canadian and American people, and the State Department itself has indicated it can be developed in an environmentally sustainable manner.”

Nebraska court approves Keystone XL pipeline route

The Calgary-based company has been waiting for over six years that U.S. issues a permit to build the $8 billion pipeline, which has become a major topic of debate for Canadian and U.S. politicians.

The U.S. Senate Energy Committee Jan. 8 passed a measure forcing approval of the pipeline, setting up a confrontation with Obama, who has pledged to veto the legislation.

The full chamber is to take up the issue next week.

Nebraska court approves Keystone XL pipeline route

Keystone XL Pipeline — Overall route map.  (Courtesy of TransCanada)