Battle Over Keystone XL Lands Before Nebraska Supreme Court

Nebraska's high court began hearing arguments on Friday in a case examining whether lawmakers short-circuited the regular approval process for TransCanada Corp.'s (TSX, NYSE:TRP) proposed $5.4 billion Keystone XL pipeline.

The debate, which centres on routing and permitting, is not expected to arrive to a conclusion any time soon, Bloomberg reports. However, the court’s ruling could force President Obama’s hand in making a final decision whether to green light the stalled project or delay it indefinitely.

Keystone XL Pipeline — Overall route map. (Courtesy of TransCanada)

Opponents are challenging the constitutionality of Nebraska’s pipeline siting law, filed in May 2012, which gave Governor Dave Heineman authority to approve a route for the Canada-to-Texas proposed pipeline on private land, without having to first go through regulators.

But in February, a Nebraska state judge struck down that law, handing a temporary victory to landowners. The decision forced the U.S. State Department to put on hold its review of project pending a resolution, which might not come until early 2015.

The proposed project would transport crude from the Canadian oil sands in Alberta to refineries on the US Gulf Coast and should counteract some of the pricing pressures bitumen producers are under.

Supporters have said it would be a boon for job creation and domestic energy production, but opponents have warned that fuel extraction from the oil sands —among the most carbon-intensive methods of energy production— would likely increase should the project be approved.

Cecilia Jamasmie of Mining.com