LINCOLN, Neb. — A Lancaster County district judge has refused to block a lawsuit challenging the constitutionality of Nebraska's new pipeline siting law.
Judge Stephanie Stacy on Monday denied a state request to dismiss the lawsuit that was filed in May by three people who own land along the proposed route of the Keystone XL pipeline.
In the lawsuit, the three — Randy Thompson, of Martell; Susan Dunavan, of McCool Junction; and Susan Luebbe, of Stuart —say the law that established the review process is unconstitutional because it doesn't allow for judicial review and doesn't spell out what criteria should be considered when a pipeline project is being evaluated.
They also object to a provision of the new law that puts the Nebraska Department of Environmental Quality and Gov. Dave Heineman in charge of reviewing the pipeline project instead of the state's Public Service Commission, which is an independently elected group that regulates utilities.
The plaintiffs say they are concerned that a pipeline company could use the state power of eminent domain to obtain land for a project. And the lawsuit argues that the bill is unconstitutional special legislation because it can be applied only to the Keystone XL project.
TransCanada's pipeline is designed to carry tar sands oil from Canada across Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas. The company also has proposed connecting it to the Bakken oil field in Montana and North Dakota.
At a September hearing on the lawsuit, Assistant Nebraska Attorney General Katie Spohn said the landowners could not claim taxpayer rights in the dispute because no tax money is being spent. The Legislature required TransCanada to reimburse the state for the cost of the pipeline review.
"Since there is no cost and no expenditure of public funds," Spohn said, "there are no tax dollars to protect."
Spohn also said Thompson, Dunavan and Luebbe couldn't claim any damages because they don't know whether they will be on the final route.
But in Monday's order, Stacy said the issues were neither hypothetical nor contingent on future decisions by DEQ or the governor, so they were legitimate issues to be adjudicated in court. Stacy also said public money time already was being spent by DEQ in implementing the legislation, LB1161.
A spokeswoman for Nebraska Attorney General Jon Bruning said his office is reviewing the judge's ruling.
Environmentalists and other opponents have said the $7 billion project could contaminate groundwater reserves and threaten ecologically sensitive areas in Nebraska and other states along its 1,700-mile path. TransCanada has altered the pipeline's path through Nebraska to avoid the environmentally sensitive Sandhills region and a couple towns' water wells.
Those favoring the Keystone XL project, including such organizations as Americans for Prosperity, the Consumer Energy Alliance and Nebraskans for Jobs and Energy Independence, have cited the nation's need for more oil and praised its potential economic impact.
TransCanada first proposed the project in 2008. President Barack Obama in January rejected TransCanada's original application for a federal permit to build the pipeline. Since then, TransCanada has split the project into two pieces.
The company began construction in August on the southern section of the pipeline between Oklahoma and the Gulf Coast. The southern section of the pipeline didn't need presidential approval because it won't cross an international border.
After Nebraska officials finish their process, the U.S. State Department will review the project again before Obama has the final say.