Nebraska Refuses To Amend Keystone XL Application

The Keystone XL pipeline could face more delays after Nebraska regulators denied a request by TransCanada Corp. to refile its application for the project.

The Nebraska Public Service Commission said Tuesday that TransCanada couldn't amend its application to formally request an alternative route for the pipeline through the state.

TransCanada had filed the paperwork to gird against future legal challenges. Opponents of the long-delayed project immediately claimed the commission's decision as a victory.

At issue is a procedural quirk concerning the route that the oil pipeline would take on its 1,700-mile journal from the oil sands region of Alberta in western Canada to Steele City, Neb. Last month Nebraska regulators approved a new route before TransCanada had officially requested it. Pipeline opponents immediately seized on the move as a procedural misstep and said they planned to make a new case against the Keystone XL pipeline in state court.

TransCanada had sought to amend its application with the new route in an attempt to reduce the possibility that the commission's approval of the pipeline could be overturned. Spokesman Terry Cunha said the company would take time to review Tuesday's decision and determine the appropriate next steps.

"More importantly, Keystone XL remains a viable project with strong commercial support," he said.

David Domina, a lawyer representing landowners opposed to the Keystone pipeline extension, hailed the regulators' rejection as a victory.

"It's pretty improbable that this pipeline will get built in Nebraska," he said.

TransCanada could appeal the commission's ruling, but that may take several months, Mr. Domina said. If the company were to lose that appeal, TransCanada would have to begin anew its application for the alternative route approved by the commission last month.

Katie Bays, an energy analyst at Height Securities, said Tuesday's ruling was not surprising because regulators very rarely reconsider their decisions. She said opponents of the pipeline will now argue in court that the commission did not have the right to approve the alternative route without a formal request from TransCanada.

The legal process could take months to resolve and TransCanada could see other delays. "As for TransCanada, they are stuck working with landowners to obtain right-of-way for the alternative route," Ms. Bays said. "Eventually, they may seek to use eminent domain to secure land from reluctant landowners, but we expect a lengthy negotiation process beforehand."

Vipal Monga contributed to this article.

Write to Christopher M. Matthews at christopher.matthews@wsj.com

(END) Dow Jones Newswires

December 19, 2017 15:44 ET (20:44 GMT)