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TransCanada is warning Nebraska landowners who refuse to sign right-of-way contracts for the controversial Keystone XL pipeline that the company plans to proceed with eminent domain.

The 2012 state law that let Gov. Dave Heineman give final approval of the proposed Keystone XL route through Nebraska came with a deadline. TransCanada has until Jan. 22, two years after Heineman gave the company the thumbs-up, to begin eminent domain proceedings, which could force easements to allow construction, operation and maintenance of the pipeline.

Basically, the company has to use it or lose it.

But the issue could be moot if the Nebraska Supreme Court sides with a Lancaster County district judge who found the law, the Nebraska Major Oil Pipeline Siting Act, unconstitutional because it allowed the approval process to bypass the Nebraska Public Service Commission.

The high court is reviewing the legal challenge. It could issue a ruling as early as Friday, or the decision could come next year -- after the eminent domain deadline has passed.

“While we would prefer not to initiate the process to acquire outstanding land rights while there is uncertainty, we are bound by that deadline in order to meet our responsibility to continue to prepare to build the pipeline,” Andrew Craig, TransCanada’s Omaha-based land manager, said in the letter.

If the Supreme Court upholds the lower court’s decision, TransCanada has said it plans to file an application to have its route reviewed by the Nebraska Public Service Commission, which also oversees railroads, natural gas pipelines, taxicabs, grain warehouses, etc.

Craig said TransCanada considers eminent domain a last resort and would prefer to come to an out-of-court agreement with landowners. His goal is to get another 10 percent of Nebraska right of way secured voluntarily. The rest, he believes, will have to be settled through condemnation proceedings. 

"Three to 5 percent of these people in Nebraska today base their resistance, or opposition to the project off principle. They don't think that we should be developing fossil fuels," Craig said. "I don't think we're ever going to overcome that."

The company has procured about 84 percent of the right of way it needs in Nebraska and all of the right of way it needs in South Dakota and Montana.

The Nebraska Easement Action Team, a nonprofit formed to help landowners negotiate easements, says it has more than 115 members who refuse to sign. The group has called for contractual provisions giving landowners greater control and protection, including requiring the pipeline be removed once it has outlived its useful life.

TransCanada will wait as long as possible to begin eminent domain proceedings and no date has been picked to begin filing paperwork, Craig said.

Lincoln Attorney Bill Blake, a leading expert on eminent domain law in Nebraska, called the situation a legal quagmire for TransCanada and said state law requires condemnation petitions to include documentation of all necessary state and federal approvals, which the Canadian company lacks.

“They don’t have a state permit because it has been stricken and still pending in the state of Nebraska. So they don’t have state approval, and they don’t have federal approval,” Blake said.

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Craig responded that TransCanada believes it has the right to file for eminent domain and that each application's merit will be decided by the courts.

The company needs a presidential permit to build across the United States border, but the U.S. State Department has put that permitting process on hold, saying it needs to know whether the route in Nebraska is good before it proceeds.  

Plans call for the Keystone XL pipeline to pump up to 830,000 barrels of crude oil a day 1,179 miles from Hardisty, Alberta, to a hub at Steele City in southeast Nebraska, where it would hook up with an existing pipeline connected to refineries along the U.S. Gulf Coast.

Dave Domina, the Omaha attorney representing the three landowners who challenged the state law, offered a simple response to TransCanada’s eminent-domain warning.

“Go ahead TransCanada, give it a try," Domina said. "Make our day.

“They are relying on a statute that has been declared unconstitutional, and they have an argument pending before the Supreme Court in which those issues are fully framed. I don’t think their position has even remote credibility.”

TransCanada already has spent about $2.4 billion on the Keystone XL and expects the final price tag to be about $8 billion.

Reach the writer at 402-473-7304 or nbergin@journalstar.com. Follow him on Twitter at @ljsbergin.

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