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Keystone's fate shifts to Nebraska's hands

A group of demonstrators rally against the controversial Keystone XL oil pipeline outside President Barack Obama's fundraiser at the W Hotel in San Francisco, California October 25, 2011.


Opponents of the Keystone XL pipeline now greet and/or heckle President Barack Obama at every stop these days and are planning to form a "ring" around the White House on Sunday to draw attention to their cause.

They've even enlisted Robert Redford, who produced a slick "opinion" video this month for The New York Times to underscore the threat the pipeline from Alberta's oil sands poses to the pristine American West.

But the next few days, anyway, all eyes will shift to Nebraska's 49-member legislature as it begins a special session on Tuesday to determine whether the state has the legal authority to force a re-routing of the pipeline away from the sensitive Ogallala Aquifer.

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It could mark the beginning of an entangled legal battle between the state, the federal government and Keystone-sponsor TransCanada that could push a decision over the pipeline so far into the future as to kill it.

Nebraska is unique in many ways. It is the only state with a unicameral legislature, which is officially nonpartisan, though its members (known as senators) retain party affiliations "for informational purposes."

Republicans currently hold a 34-to-15 supermajority in the legislature. Nebraska Governor Dave Heineman is also a Republican. That was supposed to signal smooth sailing for the pipeline in Nebraska, as the GOP highlighted the economic benefits of the $7-billion project.

But a funny thing happened in the summer heat: Mr. Heineman got cold feet.

"Here is my position: I support the pipeline, but I'm opposed to the route that goes through the Sandhills and over the Ogallala Aquifer," Mr. Heineman said in a Friday letter to his "fellow Nebraskans."

"TransCanada already has a pipeline route on the eastern side of the state. I would support the proposed pipeline being routed by the current pipeline."

TransCanada counters that it's too late. Eight different routes were studied during the planning process before the federal government settled on the current trajectory as the most environmentally-sensitive one.

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All of which makes Mr. Heineman's flip-flop a curious one. He has still not said whether he would sign or veto any bill – several are expected to be introduced this week – that would grant Nebraska authority over pipeline siting.

Sen. Annette Dubas, whose Twitter handle is @proud_farm_gal, is first up. She will reintroduce a bill she previously sponsored, but which got nowhere before Gov. Heineman switched tack, that would empower the Nebraska Public Service Commission to review pipeline siting.

Nebraska Speaker Mike Flood opposed the special session, arguing that the state lacks the legal authority to intervene. The U.S. State Department is the ultimate arbiter of the pipeline's fate and Secretary of State Hillary Clinton had promised a decision by year-end.

All of this raises the question as to whether Nebraska's politicians are merely engaging a favourite American pastime: political theatre.

Still, it may not matter. The longer the Keystone XL remains the focus of controversy, the dicier its fate becomes.

One good piece of news for TransCanada came last week when 15-members of Congress, led by the indomitable Sen. Bernie Sanders of Vermont, sent a letter to Mr. Obama calling for him to hold off on a decision.

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They also want the U.S. inspector general to conduct an investigation of the State Department's environmental review process amid allegations of conflict of interest.

Why was this good news for TransCanada? The group that signed the letter, which includes Ohio Congressman Dennis Kucinich and his Arizona colleague Raul Grijlava, is made up of the most liberal outliers in Congress. Mr. Obama can afford to defy them – indeed, he usually does.

Had the anti-Keystone forces rallied more moderate Democrats, TransCanada would have had much more to worry about.

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About the Author

Columnist Konrad Yakabuski writes on politics, policy and business for The Globe and Mail’s Comment section and Report on Business. More

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