Pipeline safety bill amended to guarantee land restoration

A bill that would have held pipeline companies liable for oil leaks and required proof of financial responsibility was amended to address land restoration during general file debate May 19.

LB629, introduced by Cedar Rapids Sen. Kate Sullivan, originally would have prohibited the construction or operation of a pipeline transporting a hazardous liquid unless the pipeline carrier presents evidence to the Public Service Commission of a bond or escrow account as proof of financial responsibility.

The bill also would have held pipeline companies liable for damages resulting from leaks and required them to immediately clean them up.

The bill was replaced by a Natural Resources Committee amendment. Under the amendment, a pipeline company would be responsible for restoring areas where its pipeline is constructed or operated. Restoration costs covered would include those incurred to rehabilitate real and personal property, natural resources, wildlife and vegetation.

The amendment also would permit local governments and state agencies to pursue compensation from a pipeline company to pay for maintenance and repair of roads, bridges or other infrastructure affected by pipeline construction and operation.

Sullivan said the amended bill is a first step for interstate pipeline regulation. While pipelines can be beneficial for Nebraska’s economy, she said, they need to be managed correctly to protect the natural resources of the state.

Much of the discussion on the bill referred to the proposed Keystone XL pipeline. Slated for construction in Nebraska in 2011, the 1,700-mile oil pipeline will connect Canadian crude oil suppliers to Texas refineries. The pipeline will run through Boone, Fillmore, Garfield, Greeley, Hamilton, Holt, Jefferson, Keya Paha, Merrick, Nance, Rock, Saline, Wheeler and York counties.

Lincoln Sen. Colby Coash said the reclamation standards set forth in the amendment are important in the Sandhills. The Bassett native said there is an area near his former home that still has not recovered from disturbances caused by pioneers traveling through the area. This growing hole that continues to reveal pioneer artifacts is evidence that pipeline companies need to fully restore land upheaved for construction, he said.

York Sen. Greg Adams said the amendment would offer the state some protection when pipelines are constructed. While there are legitimate questions regarding the siting of the proposed Keystone XL pipeline over the Ogallala Aquifer and through the Sandhills, he said, the Legislature shouldn’t pass legislation that delays the inevitable.

“There isn’t a whole lot we can do on interstate pipelines,” Adams said, adding that federal authorities are regulating the construction of the Keystone XL pipeline.

Malcolm Sen. Ken Haar said the amended bill would be a good first step, but the state can take a more active role in regulating pipelines. According to a Congressional Research Service letter sent to Rep. Lee Terry, he said, the state has the primary authority in siting pipelines.

Lincoln Sen. Bill Avery supported the bill but said it would have been better if it also addressed liability issues, alternative dispute resolution procedures, financial responsibility or siting concerns. He cited Montana as an example of a state that has an active role in pipeline siting. Before a company can construct a pipeline there, it must submit three routes from which the state can choose, he said.

Lawmakers voted 45-0 to adopt the committee amendment and 47-0 to advance the bill from general file.