Neb. governor urges Obama to deny pipeline permit

By GRANT SCHULTE | August 31, 2011 | 12:55 PM EDT

WASHINGTON (AP) — Nebraska Gov. Dave Heineman urged President Barack Obama and U.S. Secretary of State Hillary Clinton on Wednesday to deny a federal permit for a pipeline that would carry Canadian oil over an aquifer that supplies drinking and irrigation water to parts of several states.

Heineman said he supports pipeline projects but opposes the proposed TransCanada's Keystone XL route that would cross the vast Ogallala aquifer.

In a letter to Obama and Clinton, the Republican governor said he was concerned about the potential threat to the crucial water source for Nebraska's farmers and ranchers.

"This resource is the lifeblood of Nebraska's agricultural economy," Heineman said in the letter. "Cash receipts from farm markets contribute over $17 billion to Nebraska's economy annually. I am concerned that the proposed pipeline will have potentially detrimental effects on this valuable natural resource and Nebraska's economy."

The pipeline project is designed to carry oil from Canada across Montana, South Dakota, Nebraska, Kansas and Oklahoma on its way to refineries on Texas' Gulf Coast.

Calgary-based TransCanada in late 2008 submitted its Keystone XL project for review by the State Department, which has authority over the pipeline because it crosses an international boundary.

Heineman released the letter in the midst of continued pipeline protests in Washington, D.C. On Tuesday, actress Daryl Hannah was arrested along with other environmental protesters who ignored orders to move away from the White House.

A phone message was left Wednesday with TransCanada.

Environmental groups fear the pipeline could foul underground and surface water supplies, increase air pollution around refineries and harm wildlife. They have criticized what they consider inadequate pipeline safety and emergency spill responses.

Supporters say the environmental concerns are overblown and argue that the pipeline will create jobs and reduce the nation's dependence on Middle East oil.

Pipeline critics claimed Wednesday's letter as a victory, but said the governor still needs to call for a special legislative session or sign an executive order to address pipeline concerns.

Jane Kleeb, the executive director of the left-leaning group Bold Nebraska, said she was surprised by the announcement and hailed it as sign of growing opposition to the pipeline. But Kleeb said the governor also is trying to divert attention from the state's power to determine the pipeline's route.

"We obviously are very happy that he's decided to side with Nebraska farmers and ranchers, rather than a foreign oil company," Kleeb said. "But there's an important distinction that needs to be made here. What he's leaving out is that the route of the pipeline is up to him."

Malcolm Sen. Ken Haar, a Democrat in the officially nonpartisan Legislature, said the governor's letter "accurately reflects the opinion of most Nebraskans" who support the pipeline but oppose the proposed route. Haar has called for a special session and said he is still exploring options to prompt state action.

Heineman has said Nebraska's one-house Legislature missed its chance this year to advance pipeline regulation, because none of the proposals introduced had support. Lawmakers and the governor did pass one watered-down bill during the session, related to land reclamation costs, but critics said it failed to address their main concerns.

The governor urged pipeline critics to lobby federal regulators and U.S. Sen. Ben Nelson, a conservative Democrat considered vulnerable in the 2012 election. Nelson and pipeline critics have said responsibility for the pipe's route falls squarely on the state.

In an Oct. 12 letter to Clinton, Heineman urged regulators to make sure "an appropriate and safe route is chosen," but did not explicitly say the pipeline should be moved.