Eminent Domain Report

On Wednesday, a Nebraska District Court dealt the Keystone XL pipeline project a heavy blow.  The court invalidated a law that allowed the state's governor to approve the pipeline's passage through Nebraska.  The court ruled that the state's legislature circumvented the Public Service Commission (PSC), which regulates pipelines and other utilities, by allowing the governor to approve the route the pipeline would take through Nebraska.  The law also improperly granted TransCanada the power of eminent domain to acquire property within Nebraska, another decision that should have been made by the PSC.

The governor and attorney general for Nebraska have already appealed the decision to the state appeals court.  This decision could delay the project for several months if the PSC has to be consulted.  The application to the PSC itself could take up to six months to complete, and the PSC would have seven months to review it, and could extend the review for an additional year.  And the legislature would have to pass additional legislation allowing the PSC to act.  To make matters more difficult, TransCanada is still waiting for approval from the U.S. State Department to build the pipeline, a decision which is in the hands of the president and is expected in May.

The project is a 1,179 mile pipeline that would run from Alberta, Canada to Steele City, Nebraska, and connect with an existing line that runs to the Gulf of Mexico. The entire pipeline could move more than 800,000 barrels of crude oil each day. The cost of the project is estimated to be $5.3 billion.