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Keystone XL pipeline: Nebraska’s approval puts Obama in a bind

The Nebraska governor backed the new Keystone XL pipeline plan Tuesday. A decision by President Obama about the proposal is expected to receive heavy criticism either way.

By Staff writer / January 23, 2013

Miles of pipe ready to become part of the Keystone Pipeline are stacked in a field near Ripley, Okla.

Sue Ogrocki/AP/File

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Chicago

In just the first week of his second term, President Obama is being confronted with what could become one of the most controversial decisions of his presidency: what do with the Keystone XL pipeline.

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Mr. Obama put off the decision twice, citing concerns that the 1,700-mile pipeline extensions present environmental safety concerns in Nebraska. The original plans had it stretching along the Ogallala Aquifer, an underground water supply that is the greatest irrigation source to US farmland, supplying eight states. Sixty-five percent of the aquifer is in Nebraska, which makes the state ground zero in the debate over the pipeline.

The president ultimately blocked the pipeline’s approval in January 2012, which then allowed TransCanada, the operator based in Calgary, Alberta, to draft a new proposal in May.

On Tuesday, Nebraska Gov. Dave Heineman (R), who previously hesitated at approving the project, sent Obama and Secretary of State Hillary Rodham Clinton a letter saying he is now satisfied with the pipeline’s new routing. The potential environmental risks, he says, are lessened.

TransCanada is set to carry $200 million in third-party liability insurance to cover any cleanup costs, Governor Heineman says in the letter. He also writes that the proposed reroute “avoids many areas of fragile soils in Northern Nebraska” and “avoids a shallow groundwater area ... where the aquifer is thin, wells are shallow, and bedrock is close to the surface.”

The pipeline construction would generate $418 million in economic benefits to the state and about $13 million in property-tax revenues in its first year of operation, Heineman adds.

Russ Girling, TransCanada’s president and chief executive officer, released a statement Tuesday that lauded the governor’s approval, saying it moves the process “one step closer to Americans receiving the benefits of Keystone XL – the enhanced energy security it will provide and the thousands of jobs it will create.” The company, Mr. Girling also writes, added 57 special conditions to ensure the safety of the pipeline, including additional data sensors, remote-controlled shut-off valves, inspections, and maintenance.

The backing of Nebraska’s governor is seen as putting Obama in a tougher bind over a decision expected to receive heavy criticism either way. Environmental opponents view the pipeline as dangerous because it would carry oil extracted from Canada’s region of oil sands, which produce up to 30 percent more greenhouse gases than conventional crude oil. There are also worries about potential spills in the nation’s most sensitive agricultural terrain.

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