Next challenge to Canadian oil in the U.S.: More lawsuits

New threats suggest election of a Republican-dominated Congress in the United States won't end industry's battles in Canada

Crew work on construction of the TransCanada Keystone XL Pipeline near County Road 363 and County Road 357, east of Winona, Texas, Monday, Dec. 3, 2012.(AP Photo/The Tyler Morning Telegraph, Sarah A. Miller)

(AP Photo/The Tyler Morning Telegraph, Sarah A. Miller)

WASHINGTON – There are new threats of lawsuits against Canadian oil pipeline projects in the United States, suggesting that the election of an oil-friendly, Republican-dominated Congress won’t end the industry’s battles here.

The most famous of those projects is Keystone XL — but it’s not the only one.

A coalition of groups will also hold a news conference Wednesday to discuss a lawsuit in U.S. federal court against expansion plans for another network into the American Midwest, Enbridge Inc.’s Alberta Clipper.

Such legal threats offer a cautionary note in a symphony of speculation since last week’s U.S. midterms that the results might be a boon for bitumen.

An activist who led the fight against Keystone XL remains hopeful President Barack Obama would veto any pipeline bill that reached his desk. Should he sign it, she said, there will be another date in court.

Jane Kleeb said the grounds for such a suit would be constitutional, and revolve around whether Congress actually has the right to approve infrastructure that crosses international boundaries.

She said it would be like the ongoing case before the Nebraska courts, in which her side has argued that the state government used an unconstitutional process to approve the route.

“You would see groups and landowners suing … over the bill just like we did in Nebraska with the argument they took executive powers away from the president,” said Kleeb, director of Bold Nebraska and early opponent of the Keystone project.

“Remember, the Nebraska case is not about is the pipeline good or bad, it is about who has constitutional authority over siting and eminent domain.”

That authority does not belong to the U.S. Congress, says the lawyer fighting the pipeline in Nebraska.

Attorney Dave Domina expects a decision in the current state case within a couple of months. But he says a congressional power-play in Washington could be grounds for a fresh lawsuit.

“What is the effect of Congress passing a law that says to the president, ‘You have to approve it’? I think that answer to that is, ‘None,'” Domina said in an interview.

“I think that the president has constitutional authority to decide on border-crossing permits, and Congress doesn’t really have any role in here except to try to be political with it.

“People need to understand that anything Congress tries to do here, to meddle with that presidential power, is political theatre… The Congress can’t push it to the president, get the president to agree with political power, and think it’s over. The people might say, ‘Wait a minute. You’ve both violated the Constitution now.'”

He said it makes no difference if the president signs the law. Cross-border pipelines must be approved by government’s executive branch, following a proper review process, not the legislative branch, he noted.

The debate over congressional-versus-presidential power is as old as America itself.

The U.S. Constitution is generally vague on what the president does. It mentions a few aspects of foreign affairs that fall under his purview — the ability to appoint ambassadors, run the Navy, and negotiate international treaties, all with some level of congressional oversight.

But court decisions over time have entrenched White House power over cross-border infrastructure. In fact, some of the jurisprudence specifically involves Canadian oil.

—A South Dakota aboriginal tribe attempted to overturn an administration permit for the first Keystone pipeline and was rebuffed in a 2009 decision, which declared cross-border infrastructure decisions belong to the commander-in-chief.

—In a 2010 case on the original Alberta Clipper — Sierra Club vs. (then-Secretary of State Hillary) Clinton — the court cited ample precedent for letting the administration make its own choices on cross-border infrastructure with, including a history of presidential permits and “congressional silence” in such cases.

The Sierra Club now plans to fight the expansion of the Alberta Clipper, and will hold a news conference Wednesday to discuss a suit filed in federal court in Minnesota.

A coalition of aboriginal and environmental groups are arguing that the State Department has to conduct a full review of the plan to nearly double the network’s capacity, and was wrong to forgo such a review on the basis that the larger network will be based on existing infrastructure.

The State Department is in charge of reviewing cross-border pipelines, with the president having the final say, according to different executive orders including the most recent one issued in 2004 by George W. Bush.

The new, oil-friendly Congress appears set to try wresting that power away for Keystone.

After years of delay in the project, the Republicans have said they’ll use their new law-making clout to push a bill to the president’s desk. That strategy has the enthusiastic blessing from the leaders in both congressional chambers — both of whom top the list of campaign-cash recipients from the oil industry.

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