Opponents of TransCanada's proposed Keystone XL oil pipeline cried foul Thursday, saying the company should not get a Mulligan following President Barack Obama's initial rejection of the project.

The protests came as state lawmakers voted 35-2 to give first-round approval to a bill (LB1161) by Sen. Jim Smith of Papillion that would allow Nebraska to proceed with a $2 million study to find a pipeline route through the state.

"TransCanada is coercing the Legislature to pass legislation to suit its purposes," said Ken Winston of the Nebraska chapter of the Sierra Club. 

The $7 billion, 1,700-mile Keystone XL pipeline would run from the oil sands of Alberta to refineries along the U.S. Gulf Coast. The project was met by fierce resistance from landowners and advocacy groups worried about the effects of an oil spill in the Sandhills, where water tables -- including those of the massive Ogallala Aquifer -- are particularly high in many places.

The pipeline has become a political lightning rod in Washington, D.C., and in Lincoln, where state lawmakers met in special session in November and passed two major pipeline bills.

* LB4 called on Nebraska to spend $2 million for the state Department of Environmental Quality to conduct -- with the U.S. State Department's blessing -- a study of a new route through Nebraska that avoided the Sandhills. The new route would need approval from the governor. Before that bill passed, the State Department ordered TransCanada to explore a route that wouldn't go through the Sandhills. 

Then, Speaker of the Legislature Mike Flood of Norfolk announced that he had brokered a deal whereby TransCanada agreed to voluntarily move the route out of the Sandhills. Flood then offered an amendment to LB4 that called on Nebraska to spend $2 million for the study of a new route through Nebraska that avoided the Sandhills. Flood said having the state pay for the study would guarantee it is unbiased and in Nebraska's best interests.

LB1 gave authority for siting future oil pipelines to the Nebraska Public Service Commission, which oversees telecommunications, mass transit and utilities. That law does not require Nebraska to pay for any route studies.

In December, Congressional Republicans -- who say the project will create jobs and reduce dependence on overseas oil -- tried to force Obama to make a decision on TransCanada's application within 60 days. They did that by attaching the requirement to a payroll tax cut bill that Obama supported and signed into law.

But Obama denied TransCanada's original application in January and said he was doing so because a 60-day timetable for action set by Congress didn't give Nebraska enough time to conduct its review of an alternative to the original route through the Sandhills.

TransCanada plans to reapply to build the Keystone XL, but pipeline opponents say Obama's denial of the original application essentially mooted LB4. And, they say, it means Nebraska does not have to do the study.

Some lawmakers disagreed.

"It's important that Nebraska keeps its word," Sen. Ken Schilz of Ogallala said. 

Opponents also expressed concern that LB1161 would allow TransCanada to use eminent domain to acquire land for the pipeline without having an application pending as long as the governor has approved a route through Nebraska. The legislation passed during the special session said eminent domain could be used only if the company had federal approval for the entire project.

The bill faces two more rounds of consideration.

Reach Kevin O'Hanlon at (402) 473-2682 or kohanlon@journalstar.com.