Nebraska high court tosses lawsuit over Keystone XL route

Nebraska's highest court tossed a lawsuit Friday challenging a proposed route for the Keystone XL oil pipeline, saying the landowners who sued didn't have legal standing to do so.

The closely watched Nebraska Supreme Court decision could remove a major roadblock for the $7 billion cross-continental project that Republicans have vowed to make a key part of their 2015 agenda in Congress. A bill to approve the pipeline cleared a key Senate committee on Thursday, setting up a floor debate for next week as Majority Leader Mitch McConnell, R-Ky., called on President Barack Obama to rescind his veto threat.

In a split decision, Nebraska’s high court ruled that the three landowners who sued the state failed to show they had legal standing to bring their case. Four judges on the seven-judge panel agreed that they did have legal standing, but because the case raised a constitutional question, a super-majority of five judges was needed.

"The legislation must stand by default," the court said in the opinion.

The court's decision allows the U.S. State Department to decide whether the pipeline meant to carry oil from Canadian tar sands across the U.S. to Gulf Coast refineries would be in the national interest, a necessary step for the cross-border energy project.

The lawsuit challenged a 2012 state law that allowed the governor to empower Calgary-based TransCanada to force eastern Nebraska landowners to sell their property for the project. A lower court had sided with the landowners, who said that power resided with the Nebraska Public Service Commission, which regulates pipelines and other utilities.

The proposed 1,179-mile pipeline would carry more than 800,000 barrels of crude oil a day from Canada to refineries along the Texas Gulf Coast, passing through Montana, South Dakota, Nebraska, Kansas, Nebraska and Oklahoma along the way.

The newly empowered Republican-led Congress is moving ahead on approving the project, with the House scheduled to vote on Friday. The Senate is expected to finish the bill by the end of the month, setting up a showdown with President Barack Obama, who has threatened a veto.

The pipeline needs presidential approval because it would cross the U.S.-Canada border.

Environmentalists and other opponents argue that any leaks could contaminate water supplies, and that the project would increase air pollution around refineries and harm wildlife. But the GOP, oil industry and other backers say those fears are exaggerated, and that the pipeline would create jobs and ease American dependence on oil from the Middle East. They note a U.S. State Department report raised no major environmental objections.

TransCanada has said that if the Nebraska Supreme Court invalidated its proposed route, it would reapply through the Nebraska Public Service Commission, which currently includes four Republicans and one Democrat. Members are elected by district and generally take about seven months to approve or deny an application.

Nebraska Gov. Dave Heineman opposed TransCanada's original proposed route that crossed the environmentally sensitive Sandhills region, but he approved the project in 2012 after the company altered the pipeline's path to avoid the Sandhills. Heineman noted that the proposal was reviewed by the Department of Environmental Quality, which is part of his administration.

Wire services