By Reuters and Fortune Editors
January 9, 2015

By Patrick Rucker and Timothy Gardner

The House of Representatives easily passed a bill to approve the Keystone XL pipeline on Friday hours after a Nebraska court removed a major hurdle for President Barack Obama to settle the fate of the politically charged oil project.

After months of deliberation, the Nebraska Supreme Court allowed a route for the pipeline to cross the state, shifting the debate over TransCanada Corp’s controversial line fully to Washington, where Republicans now in control of Congress are seeking to force its final approval after more than six years of acrimony with the White House.

The bill passed 266 to 153 with 28 Democrats in support of the project. The Senate will debate a Keystone bill next week, but White House officials said Obama would reject the legislation if it reaches his desk.

“If presented to the president, he will veto,” spokesman Eric Schultz said in a statement.

Keystone would help carry up to 830,000 barrels of oil per day mostly from Canada’s oil sands to Gulf Coast refineries.

In Nebraska, the legal question narrowly focused on whether the governor had a right to bless a pipeline route, but the state supreme court has had the matter since February and the 64-page ruling reflects how contentious it has become.

The court said it could not decide whether legislation backed by former Governor Dave Heineman wrongly gave him authority to grant TransCanada a pipeline route in 2012. But the court was deadlocked, which amounted to ruling in the company’s favor.

“(B)ecause there are not five judges of this court voting on the constitutionality of (the legislation), the legislation must stand by default,” the seven-judge panel said in its ruling.

The pipeline debate has energized environmentalists who see it as an emblem of fossil fuel dependence and energy interests who see a Canada-to-Texas pipeline system as a tool to spur more energy production in North America.

The president has said he could not endorse a project that meaningfully worsens climate change and the issue could become one of the more controversial of his second term.

But Congress may yet settle the matter if Republicans can surmount an Obama veto or attach a Keystone provision to must-pass legislation.

Senator John Hoeven who is sponsoring the legislation has said he has 63 votes for the bill, four short of the number needed to overturn any veto.

State Department
The court’s ruling allows the U.S. State Department to decide whether the pipeline meant to carry Canadian oil sands fuel would be in the national interest, a necessary step for the cross-border energy project.

Environmentalists oppose Keystone since it could help expand oil sands development.

Obama has said his administration could not measure the project’s impact on the climate before the Nebraska Supreme Court ruled. Friday’s decision cleared the way.

Three judges said they believed the landowners who initially challenged the legislation did not do so properly, and declined to offer an opinion on whether it was constitutional.

The other four judges said they believed the law, which allowed the governor to bypass regulatory procedures and approve the route himself, was unconstitutional. But the court said it required five judges to agree in order to rule on whether a legislative enactment was constitutional, and left the law in place by default.

Anti-Keystone activists in Nebraska said on Friday they pinned their hopes on the White House to reject the project.

“While the outcome may not be what we had hoped for, I believe we have successfully sent the message that Nebraska citizens are willing to stand up,” said Randy Thompson, a landowner plaintiff who said he expected Obama would reject Keystone.

Here’s everything you need to know about the Keystone pipeline.

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