Keystone XL pipeline fate in balance as Nebraska opens hearings

Nebraska regulators will hear final arguments for and against TransCanada Corp’s  proposed Keystone XL pipeline this week before deciding whether to approve its route later this year, the last big hurdle for the long-delayed project after President Donald Trump gave it federal approval.

The proposed 1,179-mile (1,897-km) pipeline linking Canada’s Alberta oil sands to U.S. refineries has been a lightning rod of controversy for nearly a decade, pitting environmentalists worried about spills and global warming against business advocates who say the project will lower fuel prices, shore up national security, and bring jobs.

Trump's administration handed TransCanada a federal permit for the pipeline in March, reversing a decision by former President Barack Obama to reject the project on environmental grounds. But the line still needs a nod from regulators in Nebraska – the last of three states to approve its proposed path into the heartland.

Nebraska’s Public Service Commission is meant to weigh whether the project is in the state’s public interest, and will announce a decision by November.

Proponents will argue the project will bring in hundreds of jobs and millions of dollars in revenues, while opponents – including scores of landowners on the proposed route – will argue the jobs are temporary and the risks from spills to local industries like cattle ranching too great.

If the commission approves the line, TransCanada could seek to seize property using eminent domain law - a politically unpalatable option in the conservative state.

Trump has said the project would create 28,000 jobs nationwide, but a 2014 State Department study predicted just 3,900 construction jobs and 35 permanent jobs. The White House has said the pipeline is exempt from a Trump executive order requiring new pipelines to be made from U.S. steel, because much of the pipe is already built and stockpiled.

The 830,000 barrel-per-day Keystone XL would link Alberta to an existing pipeline network feeding U.S. refineries and ports along the Gulf of Mexico.

The project could be a boon for Canada, which has struggled to bring its reserves to market. But demand for the line has declined since it was first proposed, due to surging U.S. production, lower prices, and other Canadian pipeline projects.

Nebraska's commission has told opponents the business case for the line will not be considered. The commission is also not permitted to consider environmental issues because the route already has an environmental permit.

(Additional reporting by Valerie Volcovici in Washington, and Ethan Lou in Calgary; Writing by Richard Valdmanis; Editing by Lisa Shumaker)