Opinion ID: 2768591
Heading Depth: 3
Heading Rank: 3

Heading: Legislature Passes L.B. 1161 Giving

Text: Major Oil Pipeline Carriers a P rocedural Choice On January 19, 2012, during the regular session, Senator Jim Smith introduced L.B. 1161, which amended the statutory changes to § 57-1101 enacted by MOPSA and § 3 of L.B. 4.25 As explained, under MOPSA, the Legislature had previously amended § 57-1101 to provide that a pipeline carrier had to 20 See L.B. 4, § 3(2) (codified at Neb. Rev. Stat. § 57-1503(2) (Cum. Supp. 2014)). 21 See id. 22 See 2012 Neb. Laws, L.B. 4A, 1st Spec. Sess. 23 See L.B. 4, § 3(4) (codified at § 57-1503(4)). 24 See id., § 8. 25 See Legislative Journal, 102d Leg., 2d Sess. 292 (2012). Nebraska Advance Sheets THOMPSON v. HEINEMAN 807 Cite as 289 Neb. 798 apply for and obtain the PSC’s approval before exercising eminent domain power to build a pipeline—unless it had a pending application for a presidential permit. L.B. 1161 eliminated this statutory exemption.26 But the Legislature also enacted a regulatory choice for major oil pipeline carriers seeking to exercise eminent domain power. Under § 1 of L.B. 1161, a pipeline carrier had two choices: It could comply with § 3 of L.B. 4, as amended by L.B. 1161, “and receive the approval of the Governor for the route,” or it could comply with the MOPSA approval process through the PSC.27 Originally, § 3 of L.B. 4 did not require a pipeline carrier to apply for approval from the DEQ or the Governor. As noted, it authorized the DEQ to collaborate with federal agencies in producing a supplemental environmental impact statement for Nebraska and authorized the Governor to approve that statement.28 But L.B. 1161 amended § 3 of L.B. 4 so that the DEQ had two options. It could still collaborate with federal agencies on preparing a supplemental environmental impact statement. But instead of collaborating with federal agencies, the DEQ could now choose to independently evaluate a proposed route submitted by a pipeline carrier for being included in a federal review process to determine the environmental impact of an oil pipeline.29 Senator Smith testified at the committee hearing that L.B. 1161 was intended to decouple the DEQ’s efforts from those of the U.S. Department of State under federal law and to allow the DEQ to continue with its review of an alternative route for the Keystone XL pipeline.30 This decoupling was necessary because TransCanada did not have a permit request pending with the U.S. Department of State. And after the President denied TransCanada’s application for a permit, 26 See L.B. 1161, § 4. 27 See id., § 1 (codified at § 57-1101 (Cum. Supp. 2014)). 28 See L.B. 4, § 3. 29 See L.B. 1161, § 7 (codified at § 57-1503(1)(a)). 30 See Natural Resources Committee Hearing, L.B. 1161, 102d Leg., 2d Sess. 3 (Feb. 16, 2012). Nebraska Advance Sheets 808 289 NEBRASKA REPORTS the DEQ had discontinued its review of a pipeline route in Nebraska. A representative of TransCanada testified in support of L.B. 1161 and stated that the company planned to reapply for a presidential permit.31 In response to concerns that other pipeline carriers could use L.B. 1161’s provisions in the future, TransCanada’s representative assured senators that this scenario was unlikely and that no other pipeline carrier was currently seeking to cross Nebraska.32 In conducting an independent review of a proposed route, L.B. 1161 requires the DEQ to analyze the “environmental, economic, social, and other impacts associated with the proposed route and route alternatives in Nebraska.”33 Under § 1, after the DEQ evaluates the impact of a pipeline carrier’s proposed route and submits its report to the Governor, the carrier can then seek the Governor’s approval of the route. The DEQ’s final report on TransCanada’s proposed route shows that it makes no recommendations to the Governor whether to approve a proposed route. And L.B. 1161 does not require a carrier to have approval from the DEQ for its proposed route. If the Governor approves a route, § 1 implicitly gives a pipeline carrier the power of eminent domain in Nebraska: “If condemnation procedures have not been commenced within two years after the date the Governor’s approval is granted or after the date of receipt of an order approving an application under [MOPSA], the right under this section expires.”34 In sum, when a carrier elects to proceed under the DEQ procedures, the Governor has sole authority to approve the route and thereby bestow upon the carrier the power to exercise eminent domain. Under L.B. 1161, if a pipeline carrier submits a route for evaluation by the DEQ, the carrier must reimburse the DEQ for the cost of the evaluation.35 Yet, the Legislature reappropriated 31 Id. at 18-19 (testimony of Robert Jones). 32 Id. at 20. 33 L.B. 1161, § 3. 34 Id., § 1; § 57-1101. 35 Id., § 7 (codified at § 57-1503(1)(b)). Nebraska Advance Sheets THOMPSON v. HEINEMAN 809 Cite as 289 Neb. 798 $2 million to the DEQ to carry out its duties under L.B. 1161.36 Finally, if the Governor does not approve the DEQ’s reviewed routes, he or she must notify the pipeline carrier that it must obtain route approval from the PSC.37 The Legislature did not appropriate any funds to the PSC to carry out the MOPSA requirements. L.B. 1161 did not provide for a right of appeal from the DEQ procedures, so the only appeal procedure is limited to final orders issued by the PSC under MOPSA.38 The Legislature enacted L.B. 1161 with an emergency clause; it became effective on April 18, 2012.39