LINCOLN, Neb. -- A bill that would allow Nebraska to restart a review of the Keystone XL pipeline project's route inched closer to final passage Thursday, with a requirement that the state's environmental agency hold at least one public hearing before releasing its recommendation.
The bill that advanced through a second-round legislative vote would also force pipeline developer TransCanada to reimburse the state for the cost of the study, which could reach $2 million.
Gov. Dave Heineman would have final say on the route, and his approval would give TransCanada eminent domain power before they receive a federal permit. If he doesn't certify the route, the proposal would go to an independent state commission that regulates utilities.
Thousands of Nebraska pipeline opponents filled an auditorium and a high school gymnasium last year during two U.S. State Department hearings when the project was under a federal review. Political pressure from Nebraska ultimately helped derail the project, out of concern that a pipeline leak would contaminate a massive state groundwater supply.
The changes came in response to criticism of an earlier proposal that would allow the stalled state review to proceed. TransCanada had agreed to submit to the state analysis in November in the midst of a special session, but the process halted when President Barack Obama denied a federal project permit after congressional Republicans tried to force his hand.
"We have demonstrated our willingness to address these issues," Papillion Sen. Jim Smith, the bill's sponsor, said during floor debate. "Once again, we've demonstrated that we want to work with all of our colleagues to get them on board so we can advance this very, very important piece of legislation."
The Calgary-based company agreed to submit to a Nebraska state environmental review in November, in the midst of a special session aimed at the Canada-to-Texas oil pipeline. Environmentalists and landowners had protested the Keystone XL pipeline's original path through Nebraska's environmentally sensitive Sandhills region and the Ogallala Aquifer, a massive groundwater supply.
But the state environmental review was halted in January, when Obama denied the permit after congressional Republicans tried to force his quick approval. TransCanada has said it will reapply.
Malcolm Sen. Ken Haar, who opposes the pipeline, said the state honored its obligation to the TransCanada that was reached during the special session late last year, and owed nothing more to the company.
The full 1,700-mile, $7 billion pipeline would travel from Canada through Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas. TransCanada Corp. wants to build the 36-inch pipeline to carry oil from tar sands in Alberta to refineries on the Texas Gulf Coast.
The Keystone XL project gained international attention last year, when environmentalists and some landowners pushed the Obama administration to halt the pipeline. Environmentalists say the pipeline still threatens Nebraska's water and wildlife, and they dispute company claims that it will create tens of thousands of U.S. jobs and reduce the nation's dependence on oil from hostile foreign nations.
The review is expected to cost as much as $2 million. The state has spent roughly $153,000 since November, but halted its work after the permit was denied.
The bill requires one more vote in the Legislature before it goes to Gov. Dave Heineman.