Nebraska court removes Keystone pipeline roadblock

WASHINGTON —The Nebraska Supreme Court dismissed a lawsuit over the Keystone XL pipeline Friday, saying it came one vote short of the super-majority needed to declare a state law approving the pipeline unconstitutional.

The decision puts the future of the oil pipeline squarely on President Obama's shoulders. The lawsuit had been cited by the White House as a major reason the State Department holding has held up approval of the $7 billion pipeline, which environmental groups oppose because they say it would bring millions of barrels of dirty-burning tar sands crude oil to market.

The pipeline is a top priority for congressional Republicans. The House on Friday passed legislation short-circuiting the State Department and approving the project; the Senate votes next week. The White House has threatened a veto.

As recently as Tuesday, White House Press Secretary Josh Earnest said the lingering lawsuit was one reason why approving the pipeline would be premature. A formal veto threat issued the next day cited "uncertainty due to ongoing litigation in Nebraska."

"President Obama is now out of excuses for blocking the Keystone pipeline and the thousands of American jobs it would create. Finally, it's time to start building," House Speaker John Boehner, R-Ohio, said in a statement.

The White House, however, said the project would remain with the State Department, which is reviewing the pipeline because it crosses the U.S.-Canadian border.

"Our posture and our position hasn't changed," said White House Deputy Press Secretary Eric Schultz aboard Air Force One, as Obama headed to Tennessee for an education speech. "The president believes the process should unfold at the State Department."

Environmentalists said the ruling means only that the president can now reject the pipeline based on the national interest -- power he how has but that Congress is seeking to take away. "The ruling doesn't make it right for the Congress to act as a permitting agency, usurp presidential authority or short-circuit the president's obligation to decide whether the pipeline is good for the country," said Danielle Droitsch, Canada Project director at the Natural Resources Defense Council. "It's not. It needs to be denied."

The Nebraska decision turned on an unusual provision in the Nebraska constitution. Nebraska's highest court ruled 4-3 that the three landowners who sued the state had legal standing to bring their case and that the law approving the pipeline was unconstitutional. But under the Nebraska state constitution, "No legislative act shall be held unconstitutional except by the concurrence of five judges." Only two state constitutions have such a provision; North Dakota is the other.

"The legislation must stand by default," the court said in a 64-page opinion upholding the law.

The 2012 Nebraska law effectively gave the pipeline's owner, Calgary-based TransCanada, the power of eminent domain to force eastern Nebraska landowners to sell their property for the project.

The Supreme Court decision overturned a lower court ruling last year that said only the Nebraska Public Service Commission, which regulates pipelines, had the power of eminent domain.

Follow @gregorykorte on Twitter.