Breaking: Keystone XL Obtains a PSC Decision: What's Next?

This morning, in a split 3-2 decision, the Nebraska Public Service Commission (PSC), during a public hearing, approved a route for the Keystone XL pipeline through Nebraska. But rather than approving TransCanada's "Preferred Route," the PSC approved what was referred to throughout the proceeding as the "Mainline Alternative." With two commissioners dissenting, and the approval of a route that was not TransCanada's preferred route, we would expect:

• The pipeline opponents, including the Sierra Club and Bold Alliance, as well as the Yankton Sioux Tribe (a group with a motion currently holding up a ruling in the Dakota Access Pipeline case) will almost certainly appeal.  
  
• TransCanada may itself appeal the decision since the PSC did not authorize the "Preferred Route."
  
• The upper bounds of the time to obtain finality through the appellate process, including a likely appeal to the Nebraska Supreme Court, based on a prior precedent, could be late 2019.
  
• Rulings in the appellate court will determine whether construction can begin while the appeal is pending.
  

The PSC reviewed the pipeline's proposed route under Nebraska's Major Oil Pipeline Siting Act (MOPSA), which became law in November 2011. Keystone is the first, and apparently the only, project that will ever be reviewed under the particular provisions of this statute. Under the MOPSA, appeals are initiated at Nebraska's intermediate appellate court by filing a notice of appeal with the PSC within 30 days of its decision, in this case December 20. Even if the court grants expedited review, it seems unlikely that this case can be fully briefed before late January. The intermediate appellate court is then allowed to review the entire record that was before the PSC to determine whether the decision made by the PSC is correct in the judgment of the court.

Merits of An Appeal

Because the PSC chose a route other than TransCanada's preferred route, TransCanada may appeal the decision. In its post-hearing briefs, TransCanada noted that the:
Preferred Route was the product of literally years of study, analysis, and refinement by Keystone, federal agencies and Nebraska agencies. No alternative route, including the Keystone Mainline Alternative . . . comes close to the quality of the Preferred Route.

The Mainline Alternative route follows the same route as the Preferred Route for the portion in Northern Nebraska before it diverts further east to meet up with the Keystone I Pipeline. It then turns south, colocating with Keystone I for the remainder of the route. The Mainline Alternative Route, would co-locate for approximately 100 miles for a total route length of 280.5 miles, which is 5 miles longer than the Preferred Route. The Mainline Alternative would also require an additional pumping station, but the majority of the PSC felt that the benefits of maximizing co-location opportunities and utilizing the existing utility corridor that is the Keystone I Mainline Route, outweighed these concerns.

As noted by one of the dissenting commissioners, the fact that the order picks a route that was not thoroughly studied and may impact landowners who were not notified of the fact that the pipeline could be ordered to cross their properties and therefore may not have participated in the proceeding, makes an appeal by TransCanada more likely to succeed.

Approval of even the Mainline Alternative will almost certainly lead to an appeal by opponents to the pipeline in which they will seek a reversal of the decision on at least three separate grounds: (1) the PSC made the wrong decision based on the substance in the record; (2) the provisions of the statute, which was being used for the first time ever, is unconstitutional under Nebraska's constitution because it limited the scope of the PSC's review; and (3) the statute, as applied by the PSC, violated the due process rights of the opponents by improperly limiting their ability to fully participate in the proceeding.

Whatever decision the appellate court makes on either one or both appeals, that decision will likely be appealed to the Nebraska Supreme Court. 

Time Frame to Obtain Finality

For purposes of judging how long this process may take, a previous review of the Keystone route conducted in 2012-2013 is instructive. In that case, the review was performed under an exemption to MOPSA, which allowed a pipeline with a pending application for a presidential permit to seek approval for its route from Nebraska's governor. On January 23, 2013, the governor approved the route, but there was already a court case pending that challenged the constitutionality of the statute that allowed the governor to make this decision. The lower court in that case decided that the statute was unconstitutional and that decision was appealed to the Nebraska Supreme Court. Under Nebraska law, the Supreme Court can overturn a state statute as unconstitutional only if 5 of the 7 justices find the  statute unconstitutional. In the prior case, only 4 of the 7 justices thought the statute was unconstitutional.

What is instructive from the prior Supreme Court decision for the current proceeding, however, is that the process of appeal from the finding by the Governor to the decision by the Nebraska Supreme Court took over two years. Assuming it takes a similar time for the PSC decision to move through the appeals process, it could be late 2019 before a final decision is reached in this proceeding.

If TransCanada appeals the decision, construction certainly wouldn't begin until that appeal is concluded. If TransCanada chooses not to appeal, but the opponents do appeal, the start of construction will depend on TransCanada's decision to begin construction, and whether the Nebraska courts will issue a stay to prevent construction while the appeal is considered.