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In re Application No. OP-0003

Supreme Court of Nebraska

August 23, 2019

In re Application No. OP-0003.
v.
Susan and William Dunavan et al., appellants, TransCanada Keystone Pipeline, LP, et al., appellees and cross-appellees, Yankton Sioux Tribe of South Dakota and Ponca Tribe of Nebraska, appellees and cross-appellants, and Sierra Club, Nebraska Chapter, et al., appellees.

         1. Jurisdiction: Appeal and Error. A jurisdictional question which does not involve a factual dispute is determined by an appellate court as a matter of law.

         2. Administrative Law: Statutes: Appeal and Error. The meaning and interpretation of statutes and regulations are questions of law for which an appellate court has an obligation to reach an independent conclusion irrespective of the decision made by the court below.

         3. Constitutional Law: Due Process. The determination of whether the procedures afforded to an individual comport with constitutional requirements for procedural due process presents a question of law.

         4. Public Service Commission: Appeal and Error. Under Neb. Rev. Stat. § 75-136(2) (Reissue 2018), an appellate court reviews an order of the Nebraska Public Service Commission de novo on the record.

         5. Appeal and Error. In a review de novo on the record, an appellate court reappraises the evidence as presented by the record and reaches its own independent conclusions concerning the matters at issue.

         6. Administrative Law: Appeal and Error. Where the evidence is in conflict, the Supreme Court will consider and may give weight to the fact that the agency hearing examiner observed the witnesses and accepted one version of the facts rather than another.

         7. Constitutional Law: Public Service Commission. The Nebraska Public Service Commission is an independent regulatory body created by the Nebraska Constitution in article IV, § 20.

         [303 Neb. 873] 8. Public Service Commission. The determination of what is consistent with the public interest, or public convenience and necessity, is one that is peculiarly for the determination of the Nebraska Public Service Commission.

         9. Statutes: Appeal and Error. Statutory language is to be given its plain and ordinary meaning, and an appellate court will not resort to interpretation to ascertain the meaning of statutory words which are plain, direct, and unambiguous.

         10. Statutes: Legislature: Intent. Components of a series or collection of statutes pertaining to a certain subject matter are in pari materia and should be conjunctively considered and construed to determine the intent of the Legislature, so that different provisions are consistent, harmonious, and sensible.

         11. Evidence. Unless an exception applies, only a preponderance of evidence is required in civil cases.

         12. Trial: Evidence: Proof. The burden of proof is satisfied by actual proof of the facts, of which proof is necessary, regardless of which party introduces the evidence.

         13. Administrative Law: Pleadings. The rules of pleading are not applied in administrative proceedings as strictly as they are in court proceedings.

         14. Administrative Law: Due Process: Notice. Due process requires notice and an opportunity for a full and fair hearing at some stage of the agency proceedings.

         15. Notice: Waiver. It is generally held that participation in the hearing waives any defect in the notice.

         16. Administrative Law: Appeal and Error. An appellate court will not consider an issue on appeal that was not presented to or passed upon by the administrative agency.

         17. Interventions: Final Orders: Appeal and Error. An order denying intervention is a final order for purposes of appeal.

         18. Administrative Law: Statutes. Agency regulations properly adopted and filed with the Secretary of State of Nebraska have the effect of statutory law.

         19. Rules of Evidence: Hearsay: Statutes. The Nebraska Evidence Rules provide that hearsay is admissible when authorized by the statutes of the State of Nebraska.

         20. Legislature: Courts: Evidence. The legislative branch has the right to prescribe the admissibility of certain categories of evidence, but it is solely a judicial function to determine the weight, if any, to be given such evidence.

         21. Evidence: Appeal and Error. In a civil case, the admission or exclusion of evidence is not reversible error unless it unfairly prejudiced a substantial right of the complaining party.

         [303 Neb. 874] 22. Interventions: Pleadings. Interveners can raise only issues that sustain or oppose the respective contentions of the original parties.

         23. Interventions: Parties. An intervenor who is not an indispensable party cannot change the position of the original parties or change the nature and form of the action or the issues presented therein.

         24. Interventions. An intervenor cannot widen the scope of the issues, broaden the scope or function of the proceedings, or raise questions which might be the subject of litigation but which are extraneous to the controlling question to be decided in the case.

          Appeal from the Public Service Commission.

          David A. Domina and Brian E. Jorde, of Domina Law Group, PC, L.L.O., for appellants.

          Douglas J. Peterson, Attorney General, L. Jay Bartel, David A. Lopez, and Lynn A. Melson for appellee Nebraska Public Power Service Commission.

          James G. Powers and Patrick D. Pepper, of McGrath, North, Mullin & Kratz, PC, L.L.O., for appellees TransCanada Keystone Pipeline, LP, et al.

          Jennifer S. Baker and Leonika R. Charging, of Fredericks, Peebles & Morgan, L.L.P, for appellee Yankton Sioux Tribe.

          Brad S. Jolly, of Brad S. Jolly & Associates, for appellee Ponca Tribe of Nebraska.

          Kenneth C. Winston for appellee Sierra Club, Nebraska Chapter.

          Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, Papik, and Freudenberg, JJ.

          FUNKE, J.

         The Nebraska Public Service Commission (PSC) granted the application filed by TransCanada Keystone Pipeline, LP (TransCanada), pursuant to the Major Oil Pipeline Siting Act (MOPSA), Neb. Rev. Stat. §§ 57-1401 to 57-1413 (Reissue 2010 & Cum. Supp. 2018), for approval of a major oil pipeline [303 Neb. 875] route and eminent domain authority. The PSC approved the "Mainline Alternative Route" (MAR), a 36-inch major oil pipeline and related facilities to be constructed through Nebraska, from the South Dakota border in Keya Paha County, Nebraska, to Steele City, Nebraska. The landowners, two Indian tribes, and the Sierra Club, Nebraska Chapter (Sierra Club), all intervened in the proceedings. The landowners appealed, the Indian tribes cross-appealed, and the Sierra Club attempted to appeal from the PSC's decision.

         The intervenors raise numerous arguments on appeal. Each of these arguments raises issues of public concern and represents profound, deeply held beliefs. Upon de novo review of the PSC's decision, we find the matters in controversy are resolved based on the determination of four overarching issues: The first, whether the PSC had jurisdiction to consider TransCanada's application; the second, whether TransCanada met its burden of proof; the third, whether the PSC properly considered the MAR; and the fourth, whether the intervenors were afforded due process. We answer each of these questions in the affirmative.

         At the outset, we observe that this appeal comes to us in a completely different legal framework than we confronted in Thompson v. Heineman.[1] While both cases involve the statutory process for obtaining route approval of an oil pipeline, the issues in this appeal are distinctly different from those in Thompson because here, route approval was sought from the PSC using the MOPSA procedure. In this opinion, we describe the procedures enacted by the Legislature to effectuate proceedings under MOPSA. We discuss the record in detail and show that TransCanada carried its burden of proving that the MAR is in the public interest. We then determine that the errors assigned by the intervenors are without merit. Accordingly, we affirm the PSC's determination that approval of the MAR is in the public interest.

         [303 Neb. 876] I. BACKGROUND

         TransCanada is a limited partnership organized in Delaware with its principal place of business in Houston, Texas. In 2008. TransCanada applied for a presidential permit to construct a pipeline across the Canadian border into the United States. The proposed route would have passed through the Nebraska Sandhills at a time when no legal standards existed in Nebraska to constrain an oil pipeline carrier's right to exercise eminent domain authority.[2] In 2011, Gov. Dave Heineman called a special session of the Legislature to enact siting legislation for pipeline routing.

         1. Siting Legislation

         The Legislature enacted MOPSA, 2011 Neb. Laws, L.B. 1, § 2, 1st Spec. Sess., which gave routing authority to the PSC, an independent regulatory body with duly elected officials.[3]MOPSA applies to a pipeline with an interior diameter larger than 6 inches that is built to transport petroleum products within, through, or across Nebraska.[4] MOPSA requires a major oil pipeline carrier to apply for and obtain routing approval from the PSC before the carrier is authorized to exercise eminent domain power pursuant to § 57-1101.[5]

         MOPSA recognized that federal law preempts state regulation of safety issues related to oil pipelines and that Nebraska's laws cannot interfere with the federal government's uniform standards for pipeline safety, operation, and maintenance.[6]Consequently, the Legislature enacted MOPSA to address "choosing the location of the route aside and apart from safety considerations."[7] With MOPSA, the Legislature harnessed [303 Neb. 877] Nebraska's remaining sovereign powers with respect to oil pipeline construction, granted the PSC authority to conduct proceedings and decide applications, and determined that "[t]he construction of major oil pipelines in Nebraska is in the public interest of Nebraska . . . ."[8]

         In the same special session, the Legislature enacted 2011 Neb. Laws, L.B. 4, 1st Spec. Sess., which created a separate procedural avenue for a pipeline carrier to obtain route approval. Independent from the MOPSA process, § 3 of L.B. 4 authorized Nebraska's Department of Environmental Quality (DEQ) to collaborate with any federal agency for the preparation of a supplemental environmental impact statement (SEIS) for oil pipelines within, through, or across Nebraska, in accordance with the review process under the National Environmental Policy Act of 1969, 42 U.S.C. § 4321 et seq. (2012).[9] Once completed, the DEQ was to submit the SEIS to the Governor, who then would have 30 days to indicate his or her approval of a route in writing to the relevant federal agencies.[10] Both L.B. 1 and L.B. 4 were passed with an emergency clause and became effective on the same date, November 23, 2011.

         On January 18, 2012, the President of the United States denied TransCanada's permit application. On April 17, 2012, the Legislature passed and the Governor approved 2012 Neb. Laws, L.B. 1161, which amended L.B. 1 and L.B. 4. In its original form, MOPSA did not apply to TransCanada, because the legislation contained an exemption for a pipeline carrier which had a pending application for a presidential permit.[11] L.B. 1161 eliminated that exemption, which led TransCanada to seek to obtain route approval from the PSC under MOPSA.[12]

         [303 Neb. 878] L.B. 1161 amended § 3 of LB. 4 so that the DEQ could either prepare the SEIS through collaboration with federal agencies, as L.B. 4 originally had provided, or could independently evaluate a route submitted by a pipeline carrier "for the stated purpose of being included in a federal agency's or agencies' National Environmental Policy Act review process."[13]This amendment allowed the DEQ to continue to review possible routes for the Keystone XL pipeline project, which the DEQ had ceased reviewing following the President's denial of TransCanada's application for permit.

         In conducting an independent evaluation of a proposed route, L.B. 1161 required the DEQ to hold at least one public hearing, provide opportunities for public review and comment, and analyze "the environmental, economic, social, and other impacts associated with the proposed route and route alternatives in Nebraska."[14] The DEQ would then submit its evaluation of the pipeline route to the Governor, and the pipeline carrier could then seek the Governor's approval of the route.[15]L.B. 1161 provided that a pipeline carrier's authorization to exercise eminent domain power expires "[i]f condemnation procedures have not been commenced within two years after the date the Governor's approval is granted or after the date of receipt of an order approving an application under [MOPSA]."[16]

         2. TransCanada Modifies Route

         In 2012, TransCanada modified the original route, which would have passed through the Nebraska Sandhills, based on recommendations provided by the DEQ. On September 5, 2012, TransCanada filed a supplemental environmental report with the DEQ regarding the "reroute." The "reroute" avoided [303 Neb. 879] the Sandhills and other areas of fragile soils and shallow groundwater identified by the DEQ. On January 3, 2013, the DEQ submitted a final evaluation report to the Governor in accordance with L.B. 1161. On January 22, the Governor approved the "reroute" in a letter to the President and the U.S. Department of State (the Department), asking that the DEQ's evaluation be included in the federal SEIS report. TransCanada filed condemnation actions, which were later dismissed following litigation challenging the constitutionality of L.B. 1161.

         More than 2 years passed after the Governor's approval of the route, and TransCanada no longer proceeded on that approval. On January 24, 2017, the President invited TransCanada to resubmit its permit application, which TransCanada accomplished 2 days later. On February 16, TransCanada filed an application with the PSC for approval of a major oil pipeline route. On March 23, the Department granted TransCanada a presidential permit.

         3. TransCanada's Application to PSC

         TransCanada's application to the PSC sought approval of a route designated as the "Preferred Route" (PR), which was "refined to reflect the recommendations made by the [DEQ] and the Governor's approval." The "reroute" submitted to the DEQ in 2012 "was used as the basis for developing the [PR]." The PR is 275.2 miles long and begins at the Nebraska-South Dakota border in Keya Paha County and passes through the Nebraska counties of Keya Paha, Boyd, Holt, Antelope, Boone, Nance, Merrick, Polk, York, Fillmore, and Saline before terminating in Steele City.

         The application referred to two alternative routes, the MAR and the "Sandhills Alternative Route" (SAR). TransCanada developed each of the three routes with the goal of utilizing the "existing fixed starting point" at the Nebraska-South Dakota border in Keya Paha County, north of Mills, Nebraska, and the "existing fixed ending point" at the pump station in Steele City, which is the end point of the pipeline system already existing in Nebraska, known as Keystone I. Keystone I (Image Omitted) [303 Neb. 880] runs north and south through the Nebraska counties of Cedar, Wayne, Stanton, Colfax, Butler, Seward, Saline, and Jefferson. The PR and the MAR run southeastward and were designed to avoid passing through the Sandhills, an ecological region as defined by the DEQ.

         The PR would run across the southwest corner of Boyd County and then cross the Keya Paha River; enter Holt County crossing the Niobrara River; cross the Elkhorn River in Antelope County, through Boone County; and cross the Loup River in Nance County. The route would then turn and cross the northeastern corner of Merrick County; cross the Platte River; enter Polk County and continue south through York, Fillmore, and Saline Counties; and end in Jefferson County. The PR would parallel Keystone I for 7.3 miles and would require five pump stations.

         [303 Neb. 881] The SAR is the route TransCanada initially proposed in 2008. TransCanada's application stated: "Compared to the [SAR], the overall footprint of the [PR] represents less environmental impact by avoiding the Sandhills region and minimizing impacts to areas with characteristics similar to the Sandhills, including shallow groundwater and fragile soils."

         The MAR would "follow the [PR] for 110 miles to just south of the Elkhorn River in Antelope County, then head in a southeasterly direction across Madison and Stanton counties for approximately 43 miles to intercept [Keystone I]," and head south and parallel Keystone I for 97.6 miles, crossing Shell Creek and the Platte River in Colfax County. Based on the DEQ's recommendation, TransCanada adjusted the route to divert from Keystone I for 29.8 miles to avoid the "Seward County Wellhead Protection Area." The route then rejoins Keystone I and continues through Saline County to Jefferson County. The MAR would be 5 miles longer than the PR and would require a total of six pump stations.

         TransCanada stated in the application that it viewed the PR to be superior to the MAR, because the MAR would require a greater total number of acres; increase the crossing of the ranges of federally recognized threatened and endangered species; increase the crossing of highly erodible soils; increase the crossing of unusually sensitive ecological areas; and increase crossings of perennial streams, railroads, and roads. Despite the MAR's advantages due to its co-location with Keystone I, TransCanada considered the PR to be more beneficial than the MAR, because the PR was shorter and required one fewer pump station.

         The application included a reclamation and revegetation plan to fully restore lands disturbed by construction along the route to their preconstruction capabilities. Under the Oil Pipeline Reclamation Act, Neb. Rev. Stat. §§ 76-3301 to 76-3308 (Reissue 2018), TransCanada is responsible for all reclamation costs necessary as a result of constructing and operating the pipeline, except to the extent another party is determined [303 Neb. 882] to be responsible.[17] TransCanada intends to revegetate the pipeline right-of-way as near as practicable to preconstruction conditions to ensure equivalent land capability following construction and the establishment of native plant communities along the pipeline. TransCanada represented that it will abide by § 76-3304(3) and keep its reclamation and maintenance obligations until the pipeline is permanently decommissioned or removed.

         The application specified that the pipeline would be 36 inches in diameter for the entire length of the route. Construction would occur in a linear segmented fashion within a 110-foot-wide construction right-of-way, consisting of a 60-foot temporary right-of-way and a 50-foot permanent easement. The width of the construction right-of-way may be decreased or increased to address natural resource or engineering concerns. Moreover, TransCanada stated it will adjust the route "to the extent practicable" to avoid culturally significant sites. In addition to the installation of the pipeline, the PR required the construction and operation of permanent aboveground structures, including 5 pump stations and 19 intermediate mainline valves. The pump stations would be built on purchased land ranging from 7 to 17 acres. Each intermediate mainline valve would be constructed within a fenced site, approximately 50 feet by 50 feet, located within the 50-foot-wide easement.

         TransCanada concluded its application by stating that the PR had been thoroughly evaluated by federal and state agencies, was designed to mitigate impacts to natural resources, and ensured minimal impacts to the orderly development and growth of the region. In its prayer for relief, TransCanada requested an order from the PSC that the PR is in the public interest.

         4. Prehearing Matters

         The PSC published notice of TransCanada's application in The Daily Record, a legal newspaper in Omaha, Nebraska, on [303 Neb. 883] February 20, 2017, and set the deadline for formal intervention for March 22. TransCanada filed proof of service of its application on the agencies listed in § 57-1407(3), as well as proof of notice to Antelope, Boone, Boyd, Fillmore, Holt, Jefferson, Keya Paha, Merrick, Nance, Polk, Saline, and York Counties. TransCanada later filed proof that notice of the application was filed in newspapers of general circulation in those counties.

         Numerous groups and individuals filed petitions to intervene in the proceedings based on property, economic, natural resource, social, cultural, and territorial interests. On March 30, 2017, TransCanada filed objections to certain petitions for intervention, arguing that the asserted legal rights or interests would not be affected due to the narrow scope of the proceedings. TransCanada argued that MOPSA does not provide a forum to litigate whether or not a major oil pipeline should be constructed, but instead is limited to the issue of whether or not to approve a particular pipeline route.

         On March 31, 2017, the hearing officer for the PSC issued an "Order on Formal Intervention Petitions." The order explained that, under § 57-1408(2), the applicable statutory deadline for the PSC's decision was "eight months after the issuance of a presidential permit authorizing the construction of the major oil pipeline." The presidential permit for the pipeline was issued on March 23, which meant that the PSC was required to issue its final decision on the application by November 23. The order stated that the decisions on the petitions for intervention were reached by balancing the strict deadline under MOPSA with the need to produce a complete record and afford all interested parties an opportunity to be heard.

         The order granted petitions for formal intervention filed by the landowners with no limitations or conditions. The order granted petitions for formal intervention filed by three different unions: the Midwest Regional Office of the Laborers International Union of America (Li UN A); the International Brotherhood of Electrical Workers, Local Union No. 265; and the United Association of Journeymen and Apprentices of the [303 Neb. 884] Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO (UA). The order imposed conditions on the unions' participation by ordering them to jointly offer testimony from one witness at the public hearing, participate in limited discovery, collaborate on cross-examination of up to 1 hour per witness, and submit one joint brief.

         The order granted petitions for formal intervention filed by the Ponca Tribe of Nebraska (Ponca) and the Yankton Sioux Tribe of South Dakota (Yankton Sioux). Ponca's petition stated it had a direct interest in the proceedings because the routes pass through its traditional, aboriginal, and federally recognized territory, which contains "historic, cultural, sacred and archaeological natural resources." Yankton Sioux's petition stated that the proposed pipeline would "traverse [its] ancestral territory" and that it had an interest in preserving "cultural, spiritual, and historic sites." The hearing officer found that "neither petition cite[d] a legally cognizable current real property interest in land encompassing the route," but noted that § 57-1407(4)(d) requires the PSC "to consider evidence of the social impacts of the project," and found that evaluating social impacts could encompass cultural, anthropological, and historical issues. The order imposed conditions on the tribes' petitions similar to those imposed on the unions.

         The order granted petitions for formal intervention, subject to the same or similar conditions, filed by groups and individuals asserting environmental and natural resource interests, including Bold Alliance and the Sierra Club. The order stated that under MOPSA, the PSC is prohibited from evaluating safety considerations such as "the risk or impact of spills or leaks from the major oil pipeline," but found that the PSC could appropriately consider issues such as the proposed route's "environmental impact, soil permeability, distance to groundwater, and impact on plant life and wildlife."

         The order on the petitions for intervention concluded with a separate section devoted to addressing the MAR. The order stated that "[MOPSA] requires the [PSC] to consider whether [303 Neb. 885] any other utility corridor exists that could feasibly and beneficially be used for the route of the major oil pipeline," and that the MAR "partially parallels [Keystone I]." The order therefore "encourage[d] all parties to provide evidence regarding the feasibility and potential benefits and/or drawbacks of the [MAR]." The order granted each intervenor group permission to call an additional witness and offer accompanying exhibits to provide evidence concerning the MAR. The order noted that the SAR "was previously rejected by Nebraska authorities" and therefore has "already effectively been determined to not be a viable option."

         On April 5, 2017, the hearing officer entered a case management order. The order set a prehearing conference for July 31 and announced that a public hearing on TransCanada's application would commence on August 7 in Lincoln, Nebraska. The order stated that the PSC may hold public meetings "for the purpose of receiving input from the public" and that "[a]ny comments received will be made a part of the permanent record of this proceeding." All parties were required to submit written testimony in advance and make witnesses available for cross-examination at the public hearing. The order stated that "any/all Hearing Officer Orders . . . will apply to and bind all parties, will control the course of the proceedings, and may be modified only by order of the Hearing Officer."

         The PSC published notice of the public hearing on TransCanada's application in The Daily Record newspaper on April 11, 2017. The notice also announced that the PSC would hold a public meeting in Lincoln on April 18. The PSC published notice of its August 7 public hearing in newspapers in counties along the MAR and the PR, and sent letters to the governing bodies of the cities and counties along both routes notifying them that the pipeline route could pass through their jurisdiction and seeking their views on whether that would be in the public interest. The letters indicated that the application was available on the PSC's website.

         [303 Neb. 886] On May 3, 2017, the PSC held a public meeting in York. Nebraska. On May 10, "after careful and thoughtful deliberation and reflection of the variety of public comment received by the [PSC] at the [public meeting]," the hearing officer entered an order "[m]odifying [c]ase [management [p]lan and [intervention [o]rder." The order allowed each intervenor group to present testimony from two witnesses, in addition to a "witness regarding the [MAR] as detailed in the [intervention order]."

         On June 7 and 28 and July 26, 2017, the PSC held additional public meetings in York, O'Neill, Norfolk, and Ralston, Nebraska, respectively, and received over 450 oral and written comments from the public.

         5. Public Hearing

         The PSC held a public hearing on TransCanada's application from August 7 to 10, 2017, in Lincoln. TransCanada submitted prefiled direct examination testimony from 10 witnesses, presented each witness for cross-examination, and filed rebuttal testimony from 6 witnesses. The landowner intervenors prefiled testimony from 61 witnesses and offered live testimony from 10 landowners and 1 expert witness. Ponca and Yankton Sioux each presented testimony from one witness. The natural resource intervenors presented testimony from three witnesses, and the union groups presented testimony from two witnesses.

         We provide a summary of the presentation of evidence at the public hearing, along with context added from the thousands of pages of pleadings, exhibits, testimony, and briefs in the record before the PSC.

         (a) TransCanada Testimony

         (i) Tony Palmer

         Tony Palmer is the president of TransCanada Keystone Pipeline GP, LLC, and TransCanada Keystone, LLC, which together own 100 percent of TransCanada, a company organized for the purposes of owning and constructing pipelines which transport crude oil from Canada to the United States. [303 Neb. 887] Palmer is responsible for development and oversight of the pipeline project. He testified in support of the request for approval of the PR as set forth in the application. Palmer stated the PR was designed by drawing the "shortest footprint . . . from Hardisty, Alberta, to Steele City."

         Palmer estimated the initial use of the pipeline would be 20 years, which could be extended to 50 years if it was well maintained. Palmer confirmed that TransCanada is responsible for all reclamation costs associated with the project, unless another party is determined to be responsible. Palmer represented that TransCanada and all affiliated parties will not claim any tax deductions, exemptions, credits, refunds, or rebates under the Nebraska Advantage Act, Neb. Rev. Stat. §§ 77-5701 to 77-5735 (Reissue 2009), and testified that "we do not consider selling the route an option." Palmer stated that based on TransCanada's studies and the studies conducted by the DEQ and the Department, he considered the PR to be superior to the MAR.

         (ii) Paul Fuhrer

         Paul Fuhrer, the project manager for TransCanada USA Services Inc., testified regarding the construction process for the proposed pipeline and pump stations. Fuhrer stated the top of the pipeline will sit a minimum of 4 feet below the surface of land, and a minimum of 25 feet below the surface of a water stream. Each pump station will be placed an average of 55 miles apart and utilize approximately 8 to 10 acres of land, but could utilize up to 17 acres. Shutoff valves will be placed at intervals along the pipeline, based on hydraulics and other factors, and located within a 50-foot-by-50-foot fenced enclosure.

         Fuhrer testified about the trenching operations designed to provide sufficient width and depth to support the pipeline. The construction and installation of a new pipeline would require segregating topsoil from subsoil 110 feet across, and digging trenches that are approximately 8 feet wide and 7 feet deep.

         [303 Neb. 888] (iii) Ernie Goss

         Dr. Ernie Goss, a professor of economics at Creighton University and the principal of the "Goss Institute," testified regarding his "socioeconomic" impacts report. Goss concluded that the pipeline project would generate economic activity in Nebraska such as sales, wages, and jobs, and would contribute to the state and local tax bases. He estimated that construction of the pipeline would result in positive state and local tax revenue to exceed $264 million through the year 2034. Goss concluded that during the 2-year construction period, the project would generate a total of over $890 million in Nebraska, with a labor income of $326.6 million supporting an average of 3, 397 jobs per year. He estimated that, during the operations period from 2020 through 2034, there would be an economic impact in Nebraska of $1.2 billion in output/sales, with labor income of $415.5 million supporting an average of 371.7 jobs per year. For property tax purposes, Goss considered the pipeline to be a 15-year asset which would depreciate out, except to the extent that facilities are added, replaced, or maintained.

         Goss employed an input-output method, a type of applied economics analysis that "tracks the interdependence among various producing and consuming sectors of an economy." For example, Goss asserted that each $1 million TransCanada spends on construction would create a net economic gain of $286, 522 in Nebraska and that each $1 million TransCanada spends on operation would create a net gain of $150, 000. Goss used "IMPLAN" software in forecasting the economic impact of the pipeline. IMPLAN combines input-output analysis with regional-specific statistics. Goss stated that IMPLAN is a widely used and accepted multiplier system, but agreed that IMPLAN is limited in its ability to determine whether "jobs or output are new or already existing and are simply being reallocated from other uses."

         Goss' report did not disclose the scope of his engagement, but he stated that he was engaged to update his report, initially published in 2013, to reflect the most current data. He did not [303 Neb. 889] recall how much he had been paid by TransCanada. He admitted the report was not peer reviewed and stated: "The goal was to do a study that made sense to the woman and man on the street . . . ."

         (iv) Sandra Barnett

         Sandra Barnett, an environmental specialist for TransCanada Corporation, testified regarding environmental issues. Her testimony reiterated TransCanada's commitment to comply with the Oil Pipeline Reclamation Act and to minimize potential impacts on land areas and natural resources. Barnett admitted that for affected cropland, "[t]here would be temporary yield loss during construction and perhaps for a period of time afterward," but stated that TransCanada will reclaim and revegetate the right-of-way and work with the affected landowners to return it "as close as we can make it" to preconstruction condition.

         Barnett stated that if a dispute occurs between TransCanada and a landowner about the postconstruction condition of land, the parties will reach a resolution by consulting the Natural Resources Conservation Service (NRCS), a division of the U.S. Department of Agriculture, or other agencies, and include them in the discussion in order to reach a resolution. Regarding surface water resources, Barnett admitted that during construction, there potentially will be temporary degradation to groundwater quality and aquatic habitat, as well as bank stability.

         (v) John Beaver

         John Beaver, a project manager, ecologist, and reclamation specialist with an environmental services company, has been the senior reclamation specialist and special-status species biologist for the project since 2009. He stated that TransCanada will monitor the condition of the right-of-way during the pipeline's entire operational life. He admitted that TransCanada's land surveys and "Construction Mitigation and Reclamation Plan" (CMRP) for Nebraska have not been updated since 2012.

         [303 Neb. 890] (vi) Michael Portnoy Michael Portnoy, the president and chief executive officer of an environmental consulting and engineering firm, is the lead hydrologist and project manager for soil permeability and distance-to-groundwater surveys. He has academic degrees in geology, geochemistry, hydrology, and business administration. He testified that there is a wide diversification of soil along the PR; he did not separately study the soil along the MAR.

         (vii) Dr. Jon Schmidt

         Dr. Jon Schmidt, vice president of the management contractor for the pipeline project, helped prepare TransCanada's application. He testified the application compared the different routes based on the number of acres disturbed, federally listed threatened and endangered species, amount of highly erodible soils, ecologically sensitive areas, and number of crossings of perennial streams, railroads, and roads. He did not analyze the route referred to as the "1-90 Route," which would co-locate with the entire length of Keystone I.

         On cross-examination, Schmidt agreed that the MAR "ha[d] potential environmental benefits due to its co-location with [Keystone I]." He agreed that the PR crosses five Nebraska rivers and the MAR crosses only two rivers, but stated the MAR crosses more "perennial waterbodies." He agreed that according to a map received in evidence, both the PR and the MAR cross the "Ponca Trail of Tears."

         (viii) Meera Kothari

         Meera Kothari, a professional engineer and manager for TransCanada, helped prepare the section of the application which addressed the possible routes. She agreed that the MAR could "feasibly" and "beneficially" be used in Nebraska. She testified that the MAR's deviation from Keystone I in Seward County was to "avoid the wellhead protection area based on the feedback from the DEQ" and confirmed that "there are no wellhead protection area issues on either" the PR or the MAR.

         [303 Neb. 891] (b) Landowner Interveners Testimony

         The PSC heard testimony from the landowners focusing on issues of soil compaction, topsoil loss, wind and water erosion, soil blowouts and slides, adverse impacts to crops based on increased soil temperature, and proximity of pipeline construction to water sources. The landowners also provided expert testimony on the issue of economic impact.

         (i) Arthur Tanderup

         Arthur Tanderup owns farmland in Antelope County. He and his wife conduct no-till, irrigated farming and raise corn, native corn, soybeans, and rye. He described his land as highly erodible and testified that construction will interfere with the topsoil and the benefits of no-till farming.

         (ii) Frank Morrison

         Frank Morrison owns farmland in Antelope County, where he and his wife produce popcorn, edible beans, and peanuts. The land farmed by Morrison contains 65 irrigation wells. He testified the proposed route runs approximately VA miles from his processing facilities and intersects his property almost in half.

         (in) Robert Krutz

         Robert Krutz owns land in Antelope County. He and his wife raise "natural beef," corn, and soybeans. Krutz testified that the construction could put his natural beef certification at risk, which would affect his market sales. He stated his concerns about the continued revegetation of his land which supports his livestock.

         (iv) Jeanne Crumly

         Jeanne Crumly owns land in Holt County. She and her husband conduct no-till, irrigated farming and raise corn, soybeans, hay, and potatoes. She testified that the pipeline will impact erodible and permeable soils.

         [303 Neb. 892] (v) Bonny Kilmurry

         Bonny Kilmurry owns land in Holt County. She and her husband have a cow-calf operation, and they harvest hay from pastureland. Her land contains subirrigated meadows with water close to the surface, as well as highly erodible soils, which she described as being similar to Sandhills land.

         (vi) Diana Steskal

         Diana Steskal owns land in Holt County. Steskal owns no-till, irrigated farmland that produces wheat, corn, soybeans, edible beans, and popcorn, and she urged for the protection of the natural resources on her land.

         (vii) Andy Grier Andy Grier is a manager of a ranch in Holt County. He testified about the pipeline's crossing of the Niobrara River, the potential soil erosion from land clearing, and the proximity of the pipeline to his ranch's water supplies.

         (viii) Robert Allpress

         Robert Allpress owns ranchland on the eastern border of Keya Paha County. He stated the proposed route will cross through fragile soil that is susceptible to blowouts and slides and that many plants and animals will be endangered. He testified he has observed a bald eagle's nest and whooping cranes in areas near his property. In addition, he testified that members of the Ponca ...


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