Nebraska Agency Completes Environment Review of Keystone XL

WASHINGTON - Nebraska's environment agency has completed a much-anticipated review of the Keystone XL oil pipeline in the state, finding that a new route proposed by pipeline operator TransCanada Corp. avoids sensitive regions that have been a source of concern.

The final review, released Friday, triggers a 30-day deadline for Nebraska Gov. Dave Heineman, a Republican, to make a final recommendation on the pipeline to the U.S. government.

The U.S. State Department is conducting a separate review of the pipeline because it would cross the U.S.-Canada border. The State Department is expected to issue its own draft environmental review in coming days.

TransCanada says it expects to receive a permit from the U.S. government by the end of the first quarter.

The Keystone XL pipeline has been controversial since it was first proposed in 2008, but some of the fiercest opposition has come from Nebraska. Environmental groups, landowners and lawmakers balked at an earlier route proposed by TransCanada because it passed through the state's ecologically sensitive Sand Hills region.

A new pipeline route curves east of the Sand Hills but would still cross the Ogallala Aquifer, a source of drinking water and irrigation supplies, Friday's report from the Nebraska Department of Environmental Quality said. The new route also avoids many fragile soils in northern Nebraska and shallow groundwater areas.

"I will now carefully review this report over the next several weeks," Mr. Heineman said in a statement.

Copyright (c) 2012 Dow Jones & Company, Inc.

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