Nebraska Governor OKs New Keystone Pipeline Route

The Keystone XL pipeline now moves on to the State Department for final approval.

Nebraska Gov. Dave Heineman, center, shakes the hand of Sen. Al Davis of Hyannis, bottom left, after delivering the annual State of the State address to lawmakers in Lincoln, Neb., Tuesday, Jan. 15, 2013. Gov.

Nebraska Gov. Dave Heineman, center, after delivering the annual State of the State address Jan. 15 to lawmakers in Lincoln, Neb.

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The beleaguered northern leg of the Keystone XL pipeline cleared another hurdle Tuesday after Nebraska Gov. Dave Heineman approved the pipeline's revised route, which avoids the state's environmentally sensitive Sand Hills region.

President Barack Obama rejected TransCanada's permit application for the Keystone XL pipeline in January 2012 because of concerns the project threatened Nebraska's Sand Hills region and an oil spill could contaminate the surrounding Ogallala Aquifer. The approval process for the pipeline, which would transport crude oil from Alberta, Canada to refineries in the United States, has been delayed since then pending an environmental evaluation by the state of Nebraska.

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In a letter sent to Obama Tuesday, Heineman confirmed his support for the controversial project, noting the state's final evaluation report found that the route avoided environmentally sensitive lands while generating millions of dollars in economic benefits and tax revenue for the state.

Pipeline operator TransCanada also agreed to several "mitigation measures," according to the governor's letter, including an Emergency Response Plan in case of an oil spill, water testing for surrounding landowners, and $200 million in liability insurance to cover clean-up costs for any incidents in Nebraska.

"Today's approval of the Nebraska re-route by Gov. Heineman moves us one step closer to Americans receiving the benefits of Keystone XL—the enhanced energy security it will provide and the thousands of jobs it will create," TransCanada CEO Russ Girling said in a statement.

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Industry trade association American Petroleum Institute also hailed the approval as major progress toward the construction of the project, which the group says will create thousands of jobs and boost the economy nationwide.

"With the approval from Nebraska in hand, the president can be confident that the remaining environmental concerns have been addressed," API Executive Vice President Marty Durbin said in a news release.

But with Nebraska's approval of the pipeline's new route, Obama—and the State Department, which must approve the project because it crosses an international border—faces a difficult decision, especially in light of the fiery words he used on climate change in his inaugural address. Critics of the pipeline say extraction and consumption of the heavy crude from Canada will worsen global warming and other climate issues.

"This decision is now firmly on President Obama's desk," May Boeve, executive director of grassroots climate organization, said in a statement. "Approving Keystone XL would make a mockery of the commitment he made at the inauguration to take action on climate change."

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The State Department anticipates it will make a recommendation on the pipeline's construction early this year.

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