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Nebraska gov to call session on Keystone pipeline

Mon, 24 Oct 2011 21:30 GMT

Source: reuters // Reuters

* Special legislative session to start Nov. 1

* Session could lead to changes in pipeline's path, delays

* Heineman opposes route in Nebraska, not pipeline itself

* State senator had backed away from legislation last week (Adds political affiliations of governor and Flood; concessions TransCanada is offering Nebraska; details)

By Timothy Gardner

Oct 24 (Reuters) - Nebraska Governor Dave Heineman said on Monday he will call a special session of the state legislature over TransCanada Corp's <TRP.TO> proposed $7 billion oil sands pipeline that would cross ecologically sensitive areas.

Heineman, a Republican, wants TransCanada to change the route of the Canada-to-Texas Keystone XL pipeline away from Nebraska's Sand Hills region, which sits atop the Ogallala Aquifer, one of the largest sources of water for farms in the central United States. He does not oppose the pipeline outright.

"I believe Nebraskans are expecting our best efforts to determine if alternatives exist," Heineman said in a statement. He has urged President Barack Obama and Secretary of State Hillary Clinton to deny a presidential permit for the line until the route is changed.

If Nebraska succeeds in changing the route for the pipeline, it could delay the project.

The session in Nebraska's only legislative chamber will determine whether the state can determine the siting of pipelines within its borders. It will start on Nov. 1.

The state could pass emergency legislation before the end of the year, which is when the U.S. State Department hopes to decide whether to greenlight the pipeline that would take oil sands crude from Alberta to U.S. Gulf Coast refineries, and potentially to its ports for export, an aide to Heineman said.

Supporters say the line would provide thousands of jobs and increase oil imports from a friendly neighbor. Opponents say oil sands crude causes more greenhouse gas emissions and that the petroleum is more corrosive to pipelines than average crude oil.

Last week, Mike Flood, the nonpartisan speaker of the state legislature, advised against a measure that would force TransCanada to move the right-of-way from the Sand Hills, saying such a move would unlikely hold up in court.

On Monday, Flood, who worked with Heineman on setting the start date for the session, said he also opposes the route but that siting of pipelines in the state remains a complicated legal issue.

Last week TransCanada sent a letter to Flood in which the company offered a $100 million performance bond and other oil spill protection measures to the state's legislators in an attempt to reduce opposition to the project. [ID:nN1E79H224]

TransCanada has said it is too late in the federal approval process to move the proposed path for the line. "The pipeline takes the safest route -- physically and environmentally," Shawn Howard, a spokesman for TransCanada, said on Monday. (Additional reporting by Jeffrey Jones in Calgary; Editing by David Gregorio and Andrea Evans)