Nebraska has Spent $153,000 on Pipeline Work Already

By   /   March 13, 2012  /   No Comments

By Deena Winter | Nebraska Watchdog

OMAHA – While some lawmakers are debating whether the state should spend up to $2 million reviewing the environmental impact of a new oil pipeline route that avoids Nebraska’s fragile Sandhills, the state has already spent about $153,000 of the $2 million set aside to conduct that review.

A legislative committee may hold a private meeting today on whether to advance Papillion Sen. Jim Smith’s bill that would allow the state to pay for up to $2 million in environmental review costs after TransCanada releases an alternate route.

The company ran into a wall of opposition in Nebraska to its proposed pipeline from Alberta, Canada to the Gulf Coast because it traversed Nebraska’s Sandhills and Ogallala Aquifer, prompting the State Department to deny its federal permit in mid-January. But that was after Nebraska lawmakers had struck a deal in a special session in which the state agreed to pay for up to $2 million to review a new route around the Sandhills.

Now the state is in limbo while a new debate revolves around whether Nebraska should still pay for the new route review, Opponents say the giant oil transportation company doesn’t need Nebraska’s charity. But the idea behind Nebraska paying for the review was to avoid the appearance of impropriety associated with the federal review process. TransCanada has offered to repay the state if the pipeline doesn’t go through.

The Canadian pipeline company recently announced it will begin construction on a leg of the controversial Keystone XL pipeline from Cushing, Okla., to the Gulf Coast refineries — relieving a glut of oil stored in Oklahoma — since that wouldn’t require a federal permit.

A spokesman for the Nebraska Department of Environmental Quality said the department has been on hold since TransCanada’s permit was denied in January, and its contractor, HDR Engineering, Inc. of Omaha, hasn’t done anything substantial since then. However, HDR still has been billing the state for work that occurred prior to that, according to Brian McManus, public information officer for the DEQ.

As of last week, the state had paid HDR $96,518 to help plan how the DEQ would conduct its environmental review of a new route, McManus said. The state has also incurred nearly $56,000 in “other state costs,” for a total of $152,298 in costs to Nebraska so far. Additional bills may still come in from HDR, he said.

That’s more than the $140,000 in grants to help provide free lunches to poor kids in the summer that lawmakers spent considerable time debating last week.

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