The special legislative session to deal with siting TransCanada's proposed Keystone XL oil pipeline took an abrupt turn Monday when the company agreed to not seek a route through the Sandhills. 

Speaker Mike Flood of Norfolk announced the deal he helped broker as lawmakers were on first-round debate about how they might control where the pipeline could run.

"I have visited with TransCanada, and they have agreed to voluntarily move the route out of the Nebraska Sandhills," he said. "TransCanada has agreed to do this after hearing from Nebraskans ... and the ... people who came to the Capitol to make their voices heard."

Flood offered an amendment that will be discussed in a public hearing Tuesday before the Natural Resources Committee that would -- based on TransCanada's promise -- allow the state to pay for the required environmental impact study on the new portion of the pipeline in Nebraska. Flood got word Monday that the U.S. State Department said Nebraska -- through the state Department of Environmental Quality -- would have authority to work with federal officials on such a study. 

"The DEQ will be following federal rules," Flood said. "There will be public hearings. There will be transparency. That's the way the process works, and that's the way it will work in Nebraska."

Last week, the State Department ordered TransCanada to explore a route that won't go through the Sandhills and over the Ogallala Aquifer, which is a source of drinking water for a big part of the central United States.

"This is our land. These are our people. This is our water," Flood said Monday. "If it's important enough to study and get an answer on a supplemental environmental impact statement, it's important enough for us to pay the bill."

His amendment also would give the governor a final say in signing off on the study. 

In his turn at the microphone and in a separate interview after Monday's press conference, Alex Pourbaix, TransCanada's president for energy and oil pipelines, made a number of points about where the Keystone XL project goes from here. Among them:

* TransCanada expects that discussions between Flood and the State Department will result in something less than a completely new environmental impact statement that could take years to complete. With state and federal officials working together, he thinks 6-9 months is within the realm of possibility.

* As a matter of physical distance, realigning the route to get the pipeline away from the Sandhills and the most vulnerable part of the aquifer is "probably in the 30-40 mile range."

Much of the earlier cost estimates for rerouting were because of expected delay time. If the review is expedited, the cost is much less.

* The likeliest course correction does not involve putting Keystone XL next to TransCanada's first pipeline through the state. That 30-inch Keystone line began carrying oil last year. It passes through the Lincoln area just west of Seward.

"No one is proposing to do that," Pourbaix said of a parallel path for Keystone and Keystone XL. "We're talking about a detour around the Sandhills," and "a much less significant" realignment.

* Despite the difficulties of siting Keystone XL through Nebraska, TransCanada is not intending to refocus its business plan on exporting oil out of Canada to overseas customers.

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"Canada and the United States are, I think, two of the greatest allies in the world today. They share the largest trading arrangement on earth."

Canada is a major oil producer and the United States is the largest oil consumer. "The best and most natural place for the oil to go is to the United States."

As for the special session, Flood urged the passage of LB1, by Sen. Annette Dubas of Fullerton. Called the Major Oil Pipeline Siting Act, it would give authority for siting oil pipelines to the Nebraska Public Service Commission, which oversees telecommunications, mass transit and utilities. 

But Flood said his amendment would make it so LB1 would apply only to future oil pipelines, not the Keystone XL, "so that we never have to live through this nightmare again."

"We should put oil pipeline siting legislation on the books," he said.

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Several lawmakers immediately hailed the deal and praised Flood.

"I've watched him in the four years I've been here, and time after time after time -- when it looks like it's very bleak and we're not going to find a solution -- he comes forward and leads us down that pathway," said Sen. John Harms of Scottsbluff.

Jane Kleeb of the anti-pipeline group Bold Nebraska said the deal is a huge win for Nebraska.

"But we still have concerns about TransCanada," she said. "We don't think they build safe pipelines."

TransCanada has said Keystone XL would use state-of-the-art technology and be among the safest in the world. Other proponents tout jobs the project would create and say the pipeline would help reduce the nation's reliance on overseas oil.

Pourbaix stressed the original route that was proposed through the Sandhills was deemed the safest, but that the State Department's announcement last week "did not have to do with the scientific or technical issues, but had to with what they heard from the people of Nebraska.

Pourbaix also praised Flood.

"We especially want to thank Speaker Flood for his leadership and guidance as he has been able to bring all the parties together to find a solution," he said. "Without his work, today's legislation would not be possible.

"Siting a pipeline requires proponents to balance competing interests and priorities," Pourbaix said. "Collaborating with the state of Nebraska will make it much easier to make these routing decisions going forward."

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




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