OIL AND GAS:

Neb. political tension rises over state vs. federal role on Keystone XL

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Sen. Ben Nelson (D-Neb.) today put the onus for securing any route changes to a controversial Canada-to-U.S. oil pipeline on his state's Republican governor, further escalating political tensions over the project.

The Cornhusker State is a locus of local resistance to the $7 billion Keystone XL line, which would nearly double U.S. imports of Canadian oil-sands crude if approved by the Obama administration later this year. Much of those Nebraskan objections stem from the pipeline's planned route through an aquifer that provides most in-state drinking water and houses an ecologically sensitive region known as the Sandhills.

Nebraska Gov. Dave Heineman (R) cited those concerns last week in asking Secretary of State Hillary Rodham Clinton to deny a permit for the XL link -- a top priority for the oil and gas industry as well as congressional GOP leaders. But Nelson countered today that the power to force a rerouting of the pipeline sits squarely with Heineman.

"The ball is in his court on the location, and I think he's running out of time," Nelson said of the governor, who last month criticized proposals for a special state legislative session aimed at giving Nebraska more power to steer the 36-inch pipeline away from the Ogallala Aquifer.

Speaking at an event sponsored by the American Petroleum Institute, one of Keystone XL's strongest Capitol Hill backers, Nelson said there would be little recourse for federal lawmakers if Heineman and other state officials could not secure a new path for the pipeline.

"If the governor wants it in a different location, it's a state issue," Nelson said, adding that he saw "the majority opinion" in Nebraska as pointing toward approval of the XL link with a new route, rather than the outright rejection of its federal permit that Heineman recently urged.

"If the governor or the state acquiesces ... I think that may be it."

Nebraska electoral politics have exerted particularly acute pressure on the XL project, which inspired a 10-day protest at the White House that ended this week after more than 1,000 arrests. Nelson is expected to face a difficult re-election battle against his state's Republican attorney general, Jon Bruning -- yet Bruning and Heineman have not allied on the pipeline, with the former declining to echo the latter's entreaty to Clinton.

During Heineman's 2006 gubernatorial bid, Bruning endorsed his GOP primary opponent, Tom Osborne.

Nelson said today that he had "not factored in the attorney general" as part of the debate over securing a route change for the pipeline. "[Y]ou'd ordinarily expect [Bruning] to be way out front" on the potential for legal action to prod XL sponsor TransCanada Corp. into such a shift, the Democrat added, but "I've not seen any public comments from him."

Nobel winners speak out

Meanwhile, conservationist opponents of the pipeline today touted a new letter from nine Nobel Peace Prize winners that urged President Obama to deny a permit for Keystone XL. That missive directly references Heineman's and Nelson's concern that a potential pipeline rupture could affect the Ogallala Aquifer, as well as similar fears aired by Sen. Mike Johanns (R-Neb.)

"Your rejection of the pipeline provides a tremendous opportunity to begin transition away from our dependence on oil, coal and gas and instead increase investments in renewable energies and energy efficiency," wrote the signatories to the letter, including the Dalai Lama of Tibet and Archbishop Desmond Tutu of South Africa.

Click here to read the Nobel Peace Prize winners' letter.