Nebraska governor OKs Keystone XL route

Nebraska Gov. Dave Heineman on Tuesday approved a new route for the Keystone XL pipeline that would ferry Canadian oil sands crude to the Gulf Coast, setting up a big Obama administration decision on whether to green light the controversial project.

Heineman confirmed he was endorsing the pipeline’s proposed new route around environmentally sensitive areas in Nebraska in a letter to President Barack Obama and Secretary of State Hillary Clinton.

The widely anticipated move now puts the pipeline’s future squarely in front of Obama’s State Department, which is tasked with vetting the $7 billion project because it would cross the U.S.-Canada border.

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Marty Durbin, executive vice president of the American Petroleum Institute, which has lobbied the administration to approve the pipeline, said Heineman’s decision means “another major hurdle has been cleared.”

“With the approval from Nebraska in hand, the president can be confident that the remaining environmental concerns have been addressed,” Durbin said.

TransCanada Corp., which is seeking to build the pipeline, also celebrated Heineman’s decision as moving “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.”

But environmentalists and Nebraska landowners who oppose the project said the state ignored concerns that the pipeline would expand the marketplace for bitumen harvested in Alberta, Canada. Because the hydrocarbon is typically extracted using mining and energy-intensive in-situ techniques involving underground injections of steam, environmentalists say it produces more carbon emissions from initial extraction through combustion than alternatives.

“The tar sands oil that would flow through Keystone XL is the dirtiest form of fuel on the planet, and burning it would have a devastating effect on our climate,” said May Boeve, executive director of the group, which is planning a rally in Washington, D.C. in February to highlight the issue.

The State Department is weighing Nebraska’s verdict on the pipeline as it decides whether the project is in the “national interest.” The State Department has said it is on track to make its final decision in March or April.

Separately, TransCanada Corp., is already moving ahead with construction of the southern leg of the pipeline, which does not hinge on the State Department’s decision.

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Both pipeline supporters and foes are closely watching how the administration handles the decision. Oil industry advocates have cast this as a test of the president’s devotion to energy security, since the pipeline would give the U.S. greater access to crude from a North American ally.

Meanwhile, environmentalists say this is Obama’s chance to make good on his inaugural vow to combat climate change. Obama made the commitment after his ceremonial swearing in to a second term on Monday.

“This decision is now firmly on President Obama’s desk,” Boeve said. “Approving Keystone XL would make a mockery of the commitment he made at the inauguration to take action on climate change.”

Jane Kleeb, a resident of Hastings, Neb., who has led a grassroots campaign against Keystone XL, insisted that Obama can’t support the pipeline and still make good on his climate change promise.

“You cannot say the words the president did in his inaugural address and then turn around and approve the pipeline,” she said.

The Obama administration already rejected a cross-border permit for the northern portion of the Keystone XL pipeline early last year, after the State Department concluded it needed more study and an environmental analysis of the proposed path through Nebraska.

TransCanada originally planned to route the pipeline through the environmentally sensitive Sand Hills of Nebraska, spurring fears it could contaminate drinking water supplies. Facing stiff opposition from Nebraska landowners and residents, the company worked with state leaders to develop an alternative path that navigates around that region. TransCanada filed a new permit application last spring, after drawing up the new route.

Neb. Gov. Dave Heineman’s KXL approval by