Oil pipeline regulation bill amended, advanced

Lawmakers advanced a bill from select file April 5 related to oil pipeline routing in Nebraska.

LB1161, sponsored by Papillion Sen. Jim Smith, would make changes to law enacted during a November 2011 special session called by Gov. Dave Heineman to regulate oil pipeline routing in Nebraska.

Concern over the state’s lack of oil pipeline regulation was sparked by TransCanada’s proposed Keystone XL pipeline, which is intended to carry crude oil from Canada to Gulf Coast oil refineries.

Lawmakers passed LB4 during the special session, authorizing the state Department of Environmental Quality (DEQ) to collaborate with a federal agency in a review under the National Environmental Policy Act involving a supplemental environmental impact statement (EIS) for oil pipeline projects within the state.

The bill also specified that Nebraska would fully fund the state portion of the process and the preparation of the supplemental EIS, to avoid any appearance of impropriety.

Smith said he introduced LB1161 in response to action taken at the federal level since Nebraska’s November special session. DEQ had hired a consultant for the supplemental EIS regarding TransCanada’s permit application for the Keystone XL pipeline, he said, when the federal government abruptly halted the process.

As amended on general file, the bill would broaden DEQ’s authority to study proposed pipeline routes and allow a DEQ study to determine the route of an oil pipeline within the state to be included in an application to a federal agency or agencies.

The bill also would have changed the effective date of the Major Oil Pipeline Siting Act, passed as LB1 during the special session. A select file amendment removed that provision.

Under the act, the Public Service Commission (PSC) is responsible for evaluating and approving pipeline siting applications, as well as holding public hearings to gather citizen input. In addition, an approved application is required prior to a company being granted eminent domain rights.

During select file debate, Smith offered several iterations of an amendment meant to address concerns raised about the bill during the previous round of debate.

In response, Sen. Ken Haar of Malcolm filed a motion to return LB1161 to the Natural Resources Committee. Haar said the series of amendments contained major changes to the bill and should be subject to a public hearing.

“We have had no time to look at this,” he said.

Sen. Danielle Conrad of Lincoln supported the motion, saying the public and members of the committee with jurisdiction over pipeline issues should weigh in on substantive changes to the bill. She said lawmakers were confused by the different versions of the amendment and should not rush a major public policy issue.

In response to senators’ concerns, Schuyler Sen. Chris Langemeier offered an amendment that replaced the bill and Haar withdrew his motion to return LB1161 to committee.

Langemeier said his amendment, adopted 34-1, would address a range of concerns about the bill as amended on general file and would streamline the pipeline application process.

“The goal … is to take a system and not set new policy, but try and make it clear [how] to apply for a pipeline,” he said.

The amendment removes provisions changing the effective date of LB1, passed during special session.

As amended, LB1161 also would require:
that a carrier’s eminent domain rights be terminated if they remain unused two years after approval of a pipeline application;
PSC to make public any documents or records relating to a major oil pipeline unless federal law provides otherwise;
DEQ to hold at least one public hearing on an application under review by the department; and
a carrier to reimburse DEQ for the cost of an evaluation within 60 days after notification of the cost.

Langemeier said the effect of the amendment is that all future pipeline applications will be subject to the provisions of LB4. Following a review by DEQ, an application will go to the governor, who may approve the application or refer it to the PSC for further review under the provisions laid out in LB1.

He said the changes would remove concerns about creating a closed class by doing away with automatic designations based on dates that would have determined which special session bill would apply to a pipeline application.

Following adoption of the Langemeier amendment, LB1161 was advanced to final reading by voice vote.