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Nebraska Legislature OKs Keystone pipeline support bill

OMAHA, Nebraska (Reuters) - The Nebraska Legislature approved a bill on Wednesday that would provide support for an expected new route for TransCanada Corp's Canada-to-Texas Keystone XL crude oil pipeline that would bypass an environmentally sensitive region in the state.

Environmental groups have said they plan a legal challenge to the legislation to speed up consideration of a route, which Nebraska Governor Dave Heineman has said he will sign.

An earlier proposed route would have taken the pipeline through the Sandhills region and Ogallala aquifer in Nebraska that provides drinking water to millions and irrigation for farmland, drawing opposition from landowners and environmental groups.

President Barack Obama in early 2012 delayed a decision on the pipeline until after the November 6 election due to concerns about the aquifer and the speed with which he was being required to make a decision, drawing criticism from Republicans.

Obama has since thrown his support behind TransCanada's plan for the southern leg of the pipeline from Oklahoma to Texas.

The bill, approved on a 44-5 vote in Nebraska's single-chamber Legislature, allows the state Department of Environmental Quality to review a new route within Nebraska, with Heineman holding final approval.

TransCanada spokesperson Shawn Howard said in a statement the legislation "puts the power for final route selection in Nebraska back in the hands of Nebraskans, regardless of what takes place at the federal level."

The legislation takes the primary decision out of the hands of a state public service commission established last year. The commission would conduct a second review if the governor rejects the decision of the state environmental quality department.

Howard said TransCanada would consult with the department "very soon to discuss next steps and to present them with our thoughts on a re-aligned route around the Nebraska Sandhills."

(Reporting by Timothy Gardner and David Bailey; Editing by Peter Cooney)

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