The Keystone XL Pipeline Fight Is Not Over Yet

How yesterday's decision in Nebraska is a major setback for TransCanada's pipeline project

A roadside sign against the construction of the Keystone XL pipeline on TransCanada's proposed route. Credit: AP Photo/Nati Harnik

Yesterday, after the Nebraska Public Service Commission met to decide whether to give Keystone XL a permit to cross the state, headlines seemed to hail victory for the pipeline project. "Nebraska Regulators Approve Alternative Route for Keystone XL Pipeline," the New York Times wrote. "Keystone XL pipeline wins green light in Nebraska," wrote Politico. Reuters was most decisive: "Nebraska clears path for Keystone XL pipeline, in boost for Trump." But this missed the true character of what had happened: TransCanada, a company proposing a large and expensive project, which has been dealt setback after setback, just received another one.

For the company, the struggle to get the oil out of the Alberta tar sands often resembles a game of Whack-A-Mole on a continental scale. For a decade, the terms of the game have been clear: Whoever first builds a pipeline from Alberta to the Gulf of Mexico will lock down a huge amount of bitumen supply currently transported on trains. For almost ten years, TransCanada has lobbied, threatened, and agitated for their Keystone pipeline system, and have built about two-thirds of it – the first stage of this system spilled at least 5,000 barrels in South Dakota last week. But due to years of land rights disputes, litigation and protest, TransCanada has found it impossible to cross Nebraska, meaning the crucial third stage – the Keystone XL – has remained unbuilt.

Despite wide support for the Keystone XL in the state legislature, the Bold Alliance, a coalition of landowners and environmentalists, has repeatedly stymied the company in the Nebraska legislature and in court. In 2011, they successfully lobbied to give the right to regulate pipelines to the PSC. The following year, when TransCanada-backed legislation that created an end-run around the new PSC, giving an alternate right of approval to Governor Dave Heinemann – a vehement project proponent – Bold coordinated a landowner lawsuit that went to the State Supreme Court. The results of that 2015 decision were ambiguous – four out of seven justices sided with Bold's landowners, with three abstentions. That was both a unanimous win and a technical loss – Bold had needed a 5-2 majority to overturn the statute.

But while the end-run statute was upheld, those four justices had also ruled that bypassing the PSC was unconstitutional, setting the stage for the commission's hearing this week. "Nebraska court approves controversial Keystone XL pipeline," the Guardian wrote, in a typical headline. And like the papers today, they were technically right and practically wrong – TransCanada had only won because three judges had felt the landowners, who had not yet had their property taken by the pipeline, had no standing. Had their land actually been taken by eminent domain – a right TransCanada had been fighting for – said Brian Jorde, an attorney for Bold, the decision might have looked very different.

Today's hearing represented the first time the PSC had used its new powers to regulate a pipeline, a right that TransCanada has repeatedly challenged. (Jim Smith, a state senator widely known as a TransCanada ally, proposed legislation earlier this year stripping the commissioners' salaries.) The body's decision was confusing, seeming to hand victories to both sides: The Canadian company had come before the commissioners with a specific route in mind, which tracks diagonally through the middle of the state, skirting the edge of the remote and vulnerable Nebraska Sandhills. This route, the company had argued was essential to completing the Keystone XL. The commissioners voted 3-2 to approve TransCanada for an entirely different route – offering them instead one which enters and exits the state in the same place as the company's proposed route, but tracks many miles east along the existing Keystone One pipeline, an area for which they had not applied, and presumably do not control the leases on.

"Once again, we took action and won, and defeated the governor and the [proposed] line," Jorde says. "All national press will be missing those subtleties. But that's why we keep flying under the radar." The PSC approval, he says, might well be unconstitutional. "The thing before the Commission was to say yes or no to a specific line, to be reviewed at the time of trial, and they crafted a hybrid approach to a proposal that wasn't in front of them," he says. "Do they have that authority? Maybe not." Even if it stands, if the company decides to go ahead on the new route, it still needs to take possession of the land – a fraught issue in Nebraska – and it can look forward to years of future appeals, not to mention resistance from the activist indigenous and environmental networks seen last year at Standing Rock. In a statement following the decision, Russ Girling, TransCanada's CEO, sounded less than triumphant: "As a result of today's decision, we will conduct a careful review of the Public Service Commission's ruling while assessing how the decision would impact the cost and schedule of the project."

When Donald Trump permitted the Keystone XL in March, he had ribbed Girling. "I know, Russ," he said, "because you've been waiting for a long, long time. And I hope you don't pay your consultants anything because they had nothing to do with the approval. You should ask for the hundreds of millions of dollars back that you paid them because they didn't do a damn thing except get a no vote, right?" For now, Girling continues to wait.