Neb. governor OKs Keystone XL route through state

Those favoring the Keystone XL project, including such organizations as Americans for Prosperity, the Consumer Energy Alliance and Nebraskans for Jobs and Energy Independence, have cited the nation's need for more oil and praised its potential economic impact.

Heineman said TransCanada has assured state environmental officials that the company would create an emergency response plan in case of a spill and would test water wells at landowners' request.

TransCanada executives have said the company will build a pipeline with rigorous safeguards and carry $200 million in third-party liability insurance to cover cleanup costs in Nebraska. TransCanada CEO and President Russ Girling said Tuesday that the project had passed a strict review and would help national security.

"The need for Keystone XL continues to grow stronger as North American oil production increases, and having the right infrastructure in place is critical to meet the goal of reducing dependence on foreign oil," Girling said in the statement. "Keystone XL is the most studied cross-border pipeline ever proposed, and it remains in America's national interests to approve a pipeline that will have a minimal impact on the environment."

Canadian officials also cheered the announcement.

"As we have repeatedly said, the Keystone XL Pipeline will create thousands of jobs on both sides of the border — including 140,000 in Canada," said Andrew MacDougall, a spokesman for Canadian Prime Minister Stephen Harper.

Canada exports most of its oil to the U.S. and needs a way to move its growing oil sands production from northern Alberta, which has more than 170 billion barrels of proven reserves. Daily production of 1.5 million barrels from the oil sands is expected to increase to 3.7 million in 2025. Only Saudi Arabia and Venezuela have more reserves.

Pipeline opponents are still challenging a Nebraska pipeline-siting law that was written as part of a deal to let state officials review the project. The plaintiffs — a group of Nebraska landowners opposed to the project — say they are concerned that a pipeline company could use the state power of eminent domain to obtain land for a project. A judge has allowed the lawsuit to proceed in court.

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Associated Press reporter Rob Gillies contributed from Toronto.