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Committees discuss pipeline bills

November 11, 2011

LINCOLN — The Nebraska Legislature got one step closer to enacting new pipeline laws last week as they closed the first round of committee hearings that opened debate on five bills.
As of Thursday, Nov. 10, just one bill has so far been voted into first-round debate on the Unicameral floor, Schuyler Sen. Chris Langemeier’s Legislative Bill 4. Committees have not yet voted on the four other pipeline bills.
Two common themes emerged from the hearings, with bill proponents supporting any measure that could effectively re-route TransCanada’s Keystone XL project. Bill opponents typically rallied around the idea that any legislation was effectively targeting the 1,700-mile project and therefore amounted to special legislation, which is unconstitutional.
Fullerton Sen. Annette Dubas delivered LB1 to the Natural Resources committee on Monday, Nov. 7, saying her Major Oil Pipeline Siting Act opens the door to wider discourse on oil pipelines.
“What I seek is simply what other states have,” she told the committee, of which she is also a member. “And that is a state agency that can have a seat at the table to represent Nebraska’s interest when these type of pipeline projects knock on our door.”
In nearly 10 hours of testimony, the committee heard from a wide array of supporters and detractors that included attorneys, environmental activists, TransCanada executives and landowners from the Sandhills.
If passed, LB1 would vest siting authority to the elected members of the Public Service Commission (PSC), which would review and approve pipeline applications. A key component of that process would include input from Nebraska citizens through public hearings.
Mike Hybl, PSC executive director, told the committee that the PSC is not equipped to handle the added responsibility of oil pipeline oversight. In testifying as a neutral party, he said if LB1 passed the Legislature in its current form, it would demand “a dramatic increase in the amount and variety of technical expertise required of the department.”
Two more pipeline bills were discussed the following day, Nov. 8, with Lincoln Sen. Bill Avery sending his eminent domain proposal (LB3) to the Judiciary Committee and Schuyler Sen. Chris Langemeier’s LB4 going before the Natural Resources Committee.
Avery brought an amended LB3 to the committee that would make it a criminal act for companies to pursue eminent domain action against landowners without having first obtained all necessary permits. In the case of Keystone XL, that would include the awaited presidential permit from U.S. State Department.
Eminent domain, which is written into the Fifth Amendment of the U.S. Constitution, allows the government to seize private property so long as it serves the public interest and landowners receive “just compensation,” or fair market value. Eminent domain, also known as the “Takings Clause,” is often used for public works projects such as road and power line construction.
Omaha Lawyer Dave Domina told the committee that Nebraska’s laws on oil pipelines were so thin that, under current law, a company such as TransCanada essentially had the same sovereign right to exercise eminent domain as the State of Nebraska. A company could pursue eminent domain action without any form of approval from the state, he said.
“In fact,” he told the committee, “they could do it anticipating that they build a pipeline in 2050 or 2080.”
TransCanada representative Robert Jones opposed the bill, saying it is special legislation designed to delay Keystone XL by making the company wait to pursue eminent domain proceedings. In response to questions from the committee, Jones also said TransCanada has not yet filed any eminent domain actions against Nebraska landowners who have refused to sign easement agreements.
Also on Tuesday, Nov. 8, the Natural Resources Committee discussed Langemeier’s LB4, which would give the governor the authority to approve or deny oil pipeline routes through the state.
The bill would create a panel of experts and citizens that would advise the governor on the decision. It also has a provision similar to Avery’s LB3, calling for companies to first have a “route certificate” before pursuing eminent domain action.
Janet Woolsoncroft, a Kansas landowner, testified in support of the bill, saying local oversight was necessary to protect Nebraska resources.
“I believe a state will listen to its landowners long before a federal agency will,” she said.
TransCanada’s Jones told the committee that he opposed the bill because it gave too much power to one person, the governor. In this case, he said passage of the bill would “predetermine” Keystone XL’s fate, because the governor has publicly said he opposes the current route.
“His mind is already made up on the routing issue,” he said.
Despite TransCanada’s objections, the committee voted 7-1 to advance the bill to first-round debate to begin Monday, Nov. 14, at 1:30 p.m.
Committee hearings closed out on Wednesday, Nov. 9, with the Natural Resources Committee discussing the two remaining bills, Malcolm Sen. Ken Haar’s LB5 and Avery’s LB6.
Haar’s bill would create so-called “exclusionary zones” which essentially makes the Sandhills and other environmentally sensitive areas off-limits to oil pipelines that are greater than 8 inches in diameter.
Jones told the committee that this bill was also targeting Keystone XL, which is planned to bisect the Sandhills in north-central Nebraska.
“Passing this bill would mean the majority of the state would be off-limits to pipelines,” he said.
Avery’s LB6 would require that pipeline companies post a $500 million protection or indemnity bond. The indemnity bond would be used to help offset the costs associated repairing roads, bridges or private property damaged by the construction of the pipeline. The bond could also be used to help pay any costs associated with repairing damage to the environment such as a oil leak.

Compiled from staff, legislative and other news reports.
Contact Charlie Litton at nns.clitton@gmail.com.

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